After all, what is Supply Chain Management?

From the moment raw material is produced in the field until its transformation into a useful good for the consumer, a long production path needs to be followed, requiring the participation of different agents. Managing this entire itinerary well, meeting deadlines, integrating processes and ensuring end-customer satisfaction are several objectives — as well as challenges — of the so-called Supply Chain Management (SCM).

Today, this is a concept of paramount importance within companies, since a large part of the actions necessary to compose an organized, sustainable and fluid supply chain are related to SCM strategies. The integration of companies and processes, as we will see later, is one of the foundations of this concept. This allows the joint operation of manufacturer, suppliers, partners and retailers to always focus on efficiency and maintaining consumer demands.

Given the great importance of supply chain management for business, we have prepared this post to deepen your knowledge on this topic. Keep reading and check it out this information!

The importance of properly modernizing and planning the supply chain

In times highlighted by a global economy and joint operations among companies, it is no longer possible to be competitive whilst being responsible for 100% of business processes. To a large extent, it is necessary to have the support of partners, outsource adjacent tasks and create networks that ensure maximum productivity and efficiency for operations.

In this context, purchasing, storage, internal handling, packaging, transportation, and distribution processes are not always conducted by the same agent. Actually, these activities are now part of the supply chain, a set of processes that are interconnected for a common purpose: deliver the best result to consumers.

With the evolution of technology and increased competitiveness, the supply chain has become more extensive and complex, while it has also become even more sensitive to errors, which requires strategic planning and constant modernization, to keep in line with market needs and expectations.

Then, at this point, each link in the chain needs to be well informed about the others, in order to adapt to changes in an agile and precise manner, focusing on maintaining the fluidity of processes. Today, this is streamlined by the use of technology, with proprietary software that gives agents more visibility and integration, in addition to optimized planning of the chain based on concrete demand and inventory management data.

The Supply Chain Management concept

The existence of longer and more complex supply chains, added to the need to manage them in an even more systematic and strategic way, is the current market trend. In this scenario, talking about SCM is, without a doubt, talking about one of the most important concepts for business.

In practice, Supply Chain Management can be understood as a process focused on the strategic planning of flows for goods, services, finance, information, and everything that is relevant for a good relationship among companies.

For this, specific methodologies are used to ensure the best integration and management of all stages of the chain, considering an optimized production to offer the end customer the right product, at the right time, in the right amount and conditions.

The goal of supply chain management, in addition to organizing the process flow and bolster lead time, is to reduce costs throughout all stages, while optimizing processes to deliver more performance, less waste and delays, thus ensuring customer satisfaction and a better positioning of the company in the market.

How to modernize and optimize supply chain management

Currently, the key ally of supply chain management is technology. Dedicated systems, innovative concepts and software focused on the smart use of data set the tone for how companies can invest to optimize their supply chain.

In this context, below we list some critical points that must be focused so that SCM becomes even more efficient and productive for organizations. Let’s take a look!

Mapping stages

To have broader control and greater visibility of processes, it is essential that the company maps each of the stages that are part of its supply chain.

The greater the volume of information about the processes, the easier it will be for managers to identify flaws, assess performance and make accurate decisions to remove bottlenecks, adjust activities and keep the entire chain perfectly aligned with market standards.

Integration among company areas

With data and information taking on a strategic role within organizations, more than ever it is necessary to invest in integration to establish effective supply chain management.

In this context, different company areas must communicate actively, exchanging relevant information to achieve the SCM ideal. Thus, for example, the purchasing sector must be interconnected with inventory, in order to match acquisitions to the actual business needs, avoiding unnecessary purchases and wasting resources.

Information exchange with suppliers

Suppliers are outright pillars for proper operation of the supply chain. Therefore, they need to be fully involved in the chain management. For this point, sharing information with suppliers is, without a doubt, one of the primary measures to keep the chain in line with the demands triggered by consumers.

For example, a solution focused on this sharing process makes it possible to replenish inventory in a much more agile and accurate way. The supplier can have access to the company’s inventory data, which it can use to supply the right products, at the right time, avoiding out-of-stocks, excesses and the shortage of essential goods in the company.

Centralized management

Finally, one of the most effective ways to reach maximum performance from supply chain management is through centralized management. Working with a robust information repository that is easy to access and that contains all the information necessary for decision making is essential for quick actions.

In this regard, therefore, technology emerges as the primary path fo this modernization of SCM, automating processes, synchronizing data, manufacturers, retailers, distributors, and financial institutions in a single platform. With this support, it is possible to better align operations, share data and documents and, consequently, serve your customer more efficiently.

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