Recent Changes Increasing the Importance of Supply Chain Management

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Globalization is doing its work 一 it is an undeniable part of modern international trade. The world is developing, and more and more ties are emerging, including diplomatic ones, trade ones, and, as a result, logistics ones. Indeed, logistics had gone a long way to become a separate discipline with its own clear goals, adapted to market relations.

The development of logistics is closely connected with the improvement in efficiency of logistics processes and supply chain management. Whether you own a growing corporation or just started a business, the efficiency of your supply chains determines your company’s success. This is an axiom.

A trusted software development company has analyzed the nature of effective supply chain management (SCM) and identified why SCM is becoming an increasingly important factor for success.

Top Reasons Why Supply Chain Management Matters Today

Importance of Supply Chain Management

Today, activities involved in SCM have become as important in promoting products as marketing. It is impossible to increase the market share of a product without effectively building supply chain processes.

No matter how hard you play to attract a buyer with a well-thought-out marketing campaign, you need an effective SCM system to achieve success. And here are some proofs of it.

1. Growing Consumer Expectations

It is undeniable that consumer demand is growing inexorably. For example, when ordering a product on the Internet ten years ago, you expected its delivery for about a week. And today, consumers are expecting their purchases to be delivered in a few hours.

Companies that offer same-day delivery should always have goods at hand and optimize their operations to enable the processing, packing, and shipping of orders quickly.

To ensure this, they should first address the most significant challenge: forecasting and demand planning, which requires efficient supply chain management.

2. Automation

Today, managing supply chains in the old way is no longer possible. Over time, the company undergoes changes associated with the launch of new products, review of their characteristics, goals, markets, etc.

So that these processes do not interfere with the production and marketing activities, companies strive to achieve digital transformation by actively investing in new technologies. The change in logistics, or, in other words, SCM, is an integral part of the digital transformation of the entire global economy.

3. Unpredictable Global Shocks

Focusing on increasing efficiency (the strategy that was used until 2020), no one could imagine that supply chains would ever suffer.

As they say, the trouble came from where it was less expected: by neglecting the flexibility of supply chains, companies have faced significant challenges in delivering their goods during Covid-19.

The world is still going through various upheavals, but building effective SCM will make it much easier for you to withstand these difficulties.

4. Growing e-Commerce

Selling directly to customers via the Internet eliminates many links in a company’s supply chain. For example, Walmart succeeds because it has fewer links in its supply chain: they buy directly from carefully selected manufacturers in large volumes and at a meager price rather than from branded suppliers with a steep markup.

This chain may include only two links in some companies: the customer and the warehouse. Thus, customers become the top priority.

Distribution channels should now reach the end consumer rather than retailers, which means logistics processes should allow for smaller orders rather than industrial-sized ones. And it’s the representation of an additional burden on supply chains. Thus, you should build an efficient supply chain system to succeed in selling goods on the Internet.

5. Increased Ecological Awareness

People are becoming more concerned about the state of the environment. How does this relate to the supply chain? Consumers want to know everything about the product they receive: where it was made, how it was delivered, and what environmental footprint it left. Supply chains must be transparent to meet this customer demand for correct information.

The success of an SCM system is measured by three criteria: uptime, cost reduction, and reduction in production time. The market offers many innovative solutions to improve these and other SCM performances. So if your goal is to ensure effective SCM, it is always a good idea to turn to a reliable technology partner.

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Author: Ava

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