The importance of supply chain management in today's marketplace

There is increasing talk of Supply Chain Management as it relates to companies that wish to achieve maximum productivity through efficient coordination among all stages of the supply chain.

This coordination needs to be supported by appropriate strategies, involving every activity related to resources and personnel impacted From the distribution flow of production. 

La Supply Chain Management therefore, covers every activities of business aimed at bringing the final product to market and delivering it to the customer.  

Today it is increasingly holding a’neuralgic importance for businesses, as its proper application allows you to optimize costs and achieve a better level of productivity, which is essential if you want to be competitive in your business sector.

Supply chain management, the importance of planning 

The planning of a’efficient Supply Chain Management is essential, to make sure that a distribution network is put in place that can harmonize processes and reduce the time between the actual manufacture of the product and its delivery to the end user. 

There is no un unique type of Supply Chain Management, as this must be designed according to the needs of the individual enterprise, based on its size and consequently, based on the complexity of its distribution cycle. 

The supply chain can be relatively short, being able to take place even with direct links between supplier and company, and between company and end customer. At the same time, it can prove to be significantly more complex, involving multiple resources and actors.

Therefore, its planning must be carried out considering all these aspects, which are strictly peculiar to each business reality.

In any case, the goal always remains the same: to optimize the organizational structure with the aim of achieving progressive and constant improvement in productivity, linked to ever greater customer satisfaction.

In today's now globalized and highly digitized market, it is of preponderant importance to be able to rely on streamlined and efficient production and distribution flows to establish one's brand and fight very fierce competition in virtually every sector.  

To optimize one's presence in domestic and international markets, it is also critical that Supply Chain Management be ready to change according to new trends and/or innovations, always with the aim of achieving, and possibly even exceeding, one's business goals. 

Supply Chain Management, the main steps

There are five basic steps for good supply chain management:

1. Planning: As reiterated earlier, planning is essential to anticipate what customers' future needs will be and to be able to act accordingly. It consists of verifying the resources (raw materials, components, tooling and capacity) needed for each stage of production. This activity is often supported by enterprise resource planning (ERP) software.
2. Sourcing: This phase consists of identifying suppliers who can guarantee quality raw materials and components at prices in line with market expectations and who can guarantee and meet delivery times.
3. Manufacturing: is the heart of the supply chain management process, the stage at which raw materials are transformed into the final product. During the production process, companies must pay attention to waste or other factors that may cause deviations from original plans and make immediate corrections when necessary.
4. Delivering: created the product, the distribution network must ensure timely delivery of products and ensure that even in the case of temporarily unusable transportation methods, it is still able to guarantee delivery.
5. Returning: also known as reverse logistics, the last phase is about servicing products and customer returns. This is a crucial time as poor handling of returns can damage corporate reputation and call into question all previous work.

Supply chain manager, an increasingly essential figure

In any case, a good Supply Chain Management model requires that all parties involved in one or more steps of the distribution chain together form a viable collaborative network. 

To achieve this, figures are increasingly emerging within companies that specialize precisely in managing the Supply Chain, which have the specific task of optimizing all processes related to the supply chain, including even the possible outsourcing of certain activities, especially logistics. 

The supply chain manager must ensure this, including providing a’appropriate training with the aim of expressing the full potential referring to the enterprise's resources and identifying new winning strategic models.  

His skills cannot fail to include:

• The analysis of the cost-benefit ratios of each distribution channel
• The design of all commodity flows, from the’Acquisition of raw materials to the delivery of finished product to the customer
• warehouse management
• The definition of supply chain improvement objectives
• The implementation of strategies for optimizing distribution plans
• The constant monitoring of performance trends
• The identification of training processes for staff.
• The integration of corporate marketing activities with the distribution chain

We have seen how successful Supply Chain Management is increasingly essential today for companies that want to improve their market presence and expand their business.

We of Octagona we have been at the side of businesses eager to grow for years, and we are ready to offer you our advice and all our support in this regard.

If you have any questions, please feel free to contact us.