It is well known that supply chain management is an integral part of most businesses and is essential to company success and customer satisfaction.
1-Boost Customer Service
-Customers expect the correct product assortment and quantity to be delivered.
-Customers expect products to be available at the right location.
i.e.:Customer satisfaction diminishes if an auto repair shop does not have the necessary parts in stock and can’t fix your car for an extra day or two.
-Right Delivery Time – Customers expect products to be delivered on time
i.e.: Customer satisfaction diminishes if pizza delivery is two hours late or Christmas presents are delivered on December 26.
-Right After Sale Support – Customers expect products to be serviced quickly.
i.e.:Customer satisfaction diminishes when a home furnace stops operating in the winter and repairs can’t be made for days.
2-Reduce Operating Costs
-Decreases Purchasing Cost – Retailers depend on supply chains to quickly deliver expensive products to avoid holding costly inventories in stores any longer than necessary.
-Decreases Production Cost – Manufacturers depend on supply chains to reliably deliver materials to assembly plants to avoid material shortages that would shut-down production.
-Decreases Total Supply Chain Cost – Manufacturers and retailers depend on supply chain managers to design networks that meet customer service goals at the least total cost. Efficient supply chains enable a firm to be more competitive in the market place
3-Improve Financial Position
-Increases Profit Leverage – Firms value supply chain managers because they help control and reduce supply chain costs. This can result in dramatic increases in firm profits.
-Decreases Fixed Assets – Firms value supply chain managers because they decrease the use of large fixed assets such as plants, warehouses and transportation vehicles in the supply chain.
-Increases Cash Flow – Firms value supply chain managers because they speed up product flows to customers.
i.e: if a firm can make and deliver a product to a customer in 10 days rather than 70 days, it can invoice the customer 60 days sooner.
Whether dealing with day-to-day product flows or dealing with an unexpected natural disaster, supply chain experts roll up their sleeves and get busy. They diagnose problems, creatively work around disruptions, and figure out how to move essential products to people in need as efficiently as possible.
