Over the last decade, the impact of technology (in the form of digitalization and analytic implementation) on supply chain management yielded substantial changes. With this, the requirement to equip one’s business with updated ways of supply chain management is now more than ever.
However, SCM faces certain difficulties like capacity shortages, higher rates, import/export uncertainties, etc. Under such a competitive scenario, entrepreneurs need to know that innovation is the only solution to stay ahead of their competitors. Nevertheless, any innovation, be it digitalised or otherwise, needs to be funded well which can be easily availed from popular NBFCs.
So, let’s understand in details everything about what is supply chain management, what are its benefits and the different flaws in the system.
Supply Chain Management (SCM)
Supply chain can be defined as the sequence of procedures involved in the manufacturing and distribution of a commodity. Precisely, it includes the following:
Storage and movement of raw materials from one place to another
Moving work-in-process inventories
Shifting finished products from origin point to consumption point
Supply chain is becoming increasingly popular for its contribution to the profitability of a company. This, in turn, leaves an impact on the supply chain management which is responsible for supervising the flow of goods or services.
What are the Benefits of Supply Chain Management?
Nowadays, focus of businesses has shifted from manufacturing to prioritising their customers. Hence, most companies are eager to deliver the product/service within requested period and at affordable charges perfectly.
Entrepreneurs can update their supply chain, and thus, enjoy the following benefits which justify the importance of supply chain management:
1. Less time to Launch Products in the Market
An efficient shipment network in supply chain enables organisations to deliver products/services to the market at a faster rate. Additionally, this redefines customer support and feedback. This helps the company get payments from its clients quicker.
Business owners can adopt advanced technology-equipped supply chain management by availing loans from reputed financial institutions in India.
2. Lowering Costs
The best supply chain management helps to decrease overhead expenditures by managing inventories and improvising relationship between distributors and vendors. This makes it even more essential that a businessman knows everything about supply chain management.
3. Enhanced Collaboration
Supply chain enhances the relationship among suppliers, supply chain managers, and distributors. This further improves communication among them; since all of them can stay well-informed about the status of products/services. This aids in the smooth running of a system.
Types of flow in Supply Chain Management
The importance of supply chain management supported by advanced technology lies in the fact that the movement of products/services can become efficient and cost-effective since transportation becomes simpler. There are 3 flows of a supply chain:
Financial Flow: This includes flow of cash from customer’s end to the supplier’s. After a product is received and verified by a client, he/she pays for it, and the cash then travels back to the seller.
Information flow: This involves the flow of information from supplier to client and vice-versa. It is a bi-directional flow and includes delivery status, purchase order, invoice, quotation and customer complaint.
With proper communication between the two, chances of business profit increase manifold as it establishes the business’ credibility. Companies can also save on their working capital.
Material/Product Flow: It involves the flow of products from the seller’s end to the customer’s. Product flow starts with materials being transported from the manufacturers. It is a uni-directional flow except for the occasional time when clients return a product.
However, arranging for all these developments requires strong financial backing which can be availed from reputed NBFCs like Bajaj Finserv. This financial institution offers custom-made Supply Chain Finance which comes with attractive features and benefits for smooth financing.
High-value loans of up to Rs. 30 Lakh
Flexi Loan facility to make it more affordable
Quick loan approval within 24 hours
Minimal documentation (only 2 documents required)
Hence, once you got the detailed knowledge of what is supply chain management, apply for funds to invest and improvise your business’ operations.