As the processes for receiving materials, manufacturing products and delivering them expand to include new methods and technology, efficient supply chain management is more important than ever. Advanced educational options like the online Master of Science (M.S.) in Supply Chain Management program from Florida Institute of Technology prepare professionals for leadership positions with comprehensive coursework examining the evolving complexities of the modernized field.
Advancements in technology enable processes that once took months to be completed in days, or even hours. Meanwhile, the supply chain is becoming increasingly dynamic due to globalization, involving immense challenges and exciting opportunities. So, what is supply chain management exactly, and why is it important?
What Is Supply Chain Management?
Supply chains are vital to businesses seeking to provide customers with their products. Supply chain management includes the sourcing and collection of materials, the manufacture of products, and the delivery to the consumer.
The objective of supply chain management is to discover and use the most efficient and least expensive ways to supply products. Therefore, as the systems become more detailed and complicated, businesses have more options to choose from. The best strategies require eliminating unnecessary processes and shortening turnaround time for products so that businesses remain cost-efficient, benefiting stakeholders and customers alike.
Why Supply Chain Management Is Important?
Supply chain management is critical to success for today’s businesses. It is also essential for meeting the needs and wants of consumers.
Without effective supply chains, manufacturers would not be able to source materials, create products and deliver them to customers. The globalized supply chain created the flow of goods and services that people now expect and rely on. While these global chains are impressive, they are also vulnerable to diverse risks, from natural disasters to economic uncertainty, political upheaval to global pandemics.
Supply chain managers are on the frontlines of mitigating this risk and keeping supply chains running smoothly, ensuring the products people use make it from raw materials to a finished product on a customer’s doorstep efficiently and as expected. The following are several crucial outcomes that highlight the importance of supply chain management.
Reduce Costs and Improve Finances
Businesses can reduce costs at a variety of levels in the supply chain based on data-driven insight and proactive research. Cost reduction methods may be technological in nature, rooted in digitalization, automation and other advancing technologies. Successful cost reduction techniques may also simply be data-informed decisions regarding various strategic choices businesses must make according to desired scale and contextual circumstances.
For instance, buying raw materials in bulk could increase discounts while retaining fewer products in warehouses. Accurately predicting consumer demand can decrease the likelihood of holding onto expensive assets and paying to house inventory.
Eliminating processes can reduce costs while also decreasing delivery times and increasing cash flow by minimizing the number of steps required to complete a full transaction. Any expenses that a business avoids can increase profit without inflating consumer prices. This affords the organization a competitive advantage, adding value for customers by delivering higher quality products faster and cheaper.
Improve Customer Service
Customers expect ever-faster delivery times and better products. It is essential for businesses to meet those demands by ensuring their supply chain delivers the correct products in the correct quantities at the correct time.
That means that products must be readily available when and where they are needed. Yet businesses must also set customer expectations realistically, ensuring delivery estimates are accurate.
Customers also expect better support after their purchase, requiring businesses to offer warranties and repairs in a reasonable amount of time. This requires integrating supply chain processes with logistics, customer support, repairs and service, and even future product development.
Foster Sustainability and Corporate Responsibility
Businesses can further utilize supply chains to encourage energy-efficient and sustainable practices and processes by replacing steps that are wasteful and energy-consuming. Not only do these responsible behaviors garner support from consumers, but it can also be cost-effective to avoid expensive packaging solutions that cause environmental pollution. Overall, when managed well, supply chains that use fewer resources can be more sustainable and less expensive.
Additionally, while political winds surrounding environmental practices shift, businesses that utilize global supply chains must comply with regulations spanning all the regions in which they conduct business or source materials and manufacturing services. Smart supply chain managers can future-proof their supply chains and prepare for market expansion by ensuring their supply chain processes are in compliance with evolving regulations across the globe.
Facilitate Information Sharing and Rapid Response to Market Uncertainty
Information sharing within a business provides much more efficient supply chains because there is more knowledge to make important decisions. Supply chain management strategy based on accurate, timely knowledge creates opportunities to predict outcomes of business risks during uncertainty.
This allows for more agility and better responses to change. Successful supply chain managers who know how to leverage risk and change to gain competitive advantage can lead their organizations to success amidst challenging times.
Supply Chain Management Can Also Make a Difference
Supply chain management is necessary for getting customers their products and keeping companies afloat. Yet, supply chain management is also critical for supporting medical missions and emergency response operations that get patients, victims and communities the supplies and support their lives depend on.
Those best suited for working in supply chain management have excellent analytical and communication skills. They are adept in the resource development necessary to coordinate with a variety of vendors and suppliers. Supply chain managers are fluent in the many systems, processes and emerging technologies that advance modern supply chain improvements. Aspiring professionals can develop expertise in these complex aspects of the field through advanced coursework in Florida Tech’s specialized supply chain master’s degree program.
Learn more about the online M.S. in supply chain management program from Florida Institute of Technology.
