What is Supply Chain Management | How does a supply Chain work

What is Supply Chain Management | How does a supply Chain work

Supply chain management is actively managing the many moving parts of a supply chain (blog) while aiming for maximum customer satisfaction, lower costs and competitive advantages. Each section of the supply chain was a self-contained problem so interacted directly with it. A supply chain is viewed as an interconnected series of pieces that work together to produce and deliver products to customers accurately and quickly.

Supply chains will be a key driver of customer service. Supply chain management (blog) software systems do for businesses in industries across the world. SCM can automate much of the physical supply chain process, provide analytics and business intelligence for growth. Supply chain management systems help human leadership teams fine tune business operations and it makes them as efficient and effective as possible for a competitive advantage in a particular industry.

How does a supply chain work

Supply chains management involve a complex network of resources, technologies, individuals, companies and activities that are dependent on one another. It consist of five main components:

  1. Planning and purchasing: Buyers retailers determine their supply and demand needs and place orders for products and materials.
  2. Warehousing and inventory management: Inventory is stored so orders are quickly filled. A reliable inventory management method is used to maintain sufficient inventory levels.
  3. Manufacturing: Depleted inventories are built to replenish goods after supplier orders are filled.
  4. Transportation: goods are shipped to customers.
  5. Return of goods: products that the seller has an excess product quantity and don’t meet the satisfaction needs of a customer because they’re defective and low-quality are returned to the supplier via a reverse logistics system.

When there is one disruption to a branch of a supply chains it impacts the rest of the system. And there has been no shortage of disruptions and other issues impacting the global supply chains are both pandemic and non-pandemic related.

Benefits of Supply Chain Management

  • Better flow of content, products and information
  • Improved Data Visibility
  • Enhanced Financial Practices and Cost Cutting
  • Vendor Relationships
  • Distributed Footprint
  • Lean Inventory and On-Demand Supply Chains
  • Cloud-Based
  • Liability and Risk

Many reasons there are supply chain problems

The pandemic exposed the fragility and shortcomings of supply chains. Additional unforeseen factors helped to push the entire system to the breaking point and create one big logistical nightmare.

These are the main issues that helped create the perfect storm of current problems for supply chains:

1. Unpredictable consumer spending

Pandemic began, panic buying eliminated all of the inventories of retailers and their suppliers for many products. Consumers were eager to make up for shopping time at brick and mortar stores and spend liberally.

2. Labor shortages and efficiency slowdowns

You aren’t getting manufactured to consumers as quickly as they normally would because workplaces have dealt COVID-19 outbreaks, quarantines, and burnout by workers. When workers can perform their jobs, extra workplace safety measures are slowing down efficiency.

3. Shipping delays

Shipping has been hit especially hard by labour shortages, which contributed to the unprecedented congestion occurring at shipping ports and yards around the world. Georgia’s Port of Savannah, for example, recently had 50,000 more shipping containers on-site than usual.

4. Shipping container shortages and shipping costs

Shipping containers become scarce as manufacturers. It producing more goods than they normally would to fill backorders. This has increased the cost of buying and renting containers.

5. Border restrictions and slowdowns

Goods shipped across borders haven’t been moving as quickly as normal because of border restrictions, mandatory quarantine, transport workers having to wait on corona virus test results, and general labour shortages. Governments around the world have to implement more regulation and oversight measures to combat an increase in import and export fraud.

6. Inconsistent virus testing and vaccine standards

Vaccines have been an ongoing issue. Vaccines that have been approved for use in many countries aren’t approved for use in other countries. Some companies have had mandatory vaccine requirements. Many countries haven’t had as much access to reliable vaccines as Canada, US. All of these issues are magnified during a pandemic when they apply to workers who make a living by being constantly on the move from one country to another country.

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