Originally posted on https://mtpurchasing.com/blog/what-are-the-benefits-of-supply-chain-management-scm/
As a small business, you’d love to be able to offer your customers better prices, get products out to your consumers faster, and streamline your overall supply chain.
With superior supply chain management services, you can do all that and much more.
Supply chain management, or SCM for short, is all about finding a more efficient and cost-effective way to get your products — and everything that goes into making them — to your consumer base.
Of course, there are lots of moving pieces when it comes to getting your products to their final destinations. To improve your supply chain process, you’ll need to consider things like sourcing raw materials, production costs and timelines, working with logistics, storage facilities, inventory management, and even current consumer demand for your products.
In most cases, no product makes it into the hands of a customer based on what happens inside the four walls of your office alone. That’s why you need a solid SCM system.
But what are the benefits of supply chain management services?
Read on to find out.
1. LOWER OVERALL OPERATING COSTS
We know that you’re always looking for ways to lower your operating costs without sacrificing quality.
But, with the cost of raw materials continuing to climb, that can often be a challenge.
The right SCM system can help to make that happen.
First of all, you’ll be able to avoid overbuying when it comes to your inventory. This doesn’t just save you money, it also prevents products from getting damaged, as they’ll have more shelf space in your storage facility. This, in turn, helps you to eliminate costs like customer returns.
What’s another financial benefit of an SCM system?
It can help you to lower your overall production costs. Manufacturers need you to give them accurate numbers of how many raw materials and products you’ll need. A stronger overall supply chain prevents over-ordering and also helps you to avoid shipment delays and the inability to meet consumer demand.
You may also be able to leverage your existing relationships to get discounts from your suppliers, especially if you consider group purchasing power.
2. IMPROVED CUSTOMER RELATIONS
One of the top benefits of supply chain management isn’t just improved relationships with your vendors and suppliers — it’s also better relationships with your customers.
You’ll be better at ensuring that your most popular products are in stock and that customers can find them at a location that’s close to them. A better understanding of your supply chain also means that you can speed up shipping and turnaround times.
You’ll also be able to understand exactly where your products are at all times, whether they’re in development or in transit. This means that you can keep your customers posted every step of the way.
An SCM system also allows you to offer stronger customer and service support after a sale.
Of course, with all the money you’re saving from taking a closer look at your costs and inventory levels, you may even be able to offer your customers a better price on the products they love.
That’s a great way to win customer loyalty and get ahead of your competitors.
3. A MORE EFFICIENT BUSINESS
We know you’re looking to get more out of every day at work, every customer transaction, and every deal that you negotiate with your vendors.
When you work to improve your supply chain management, you can easily — and cost-effectively — boost the entire efficiency of your business. This means you can make more products in less time, and often, for less money.
It means that you can speed up the procurement process, see orders processed from different channels all in one place, and get smarter about predicting consumer demand.
In other words, it doesn’t matter whether customers found you through your social media content marketing strategy and made a purchase that way, or if they visited your site directly. You’ll be able to see every order on one screen — which makes keeping track of your numbers easier than ever.
It can even make things much less stressful for you, your employees, and the suppliers that you work with. It’s frustrating — not to mention a huge waste of time — to constantly have to renegotiate, understand where things are, look for reasons for delays, and respond to customer complaints and questions about the location of their orders.
4. BOOSTS YOUR PROFITS
Supply chain management doesn’t just save you money.
It also helps your small business to increase its overall profits.
First of all, because you have a better understanding of customer demand, suppliers, inventory, and costs, you can start to speed up your overall production levels.
Because everything is so well-coordinated, you don’t have to worry that adding new products or buying more inventory will cause clogs in your overall product lifecycles.
And since you’ve lowered the total cost of your supply chain, you will seriously increase your profit margin. The faster you’re able to deliver goods to your consumers, the faster you can collect payments from customers and develop new, tantalizing products.
Plus, because customers like the fact that you’re able to get them what they need quickly and correctly, they’ll be much more likely to do business with you again in the future — and spread the word about your company to others.
Additionally, you’ll also save money on the cost of your company’s fixed assets — things like warehousing costs, transportation costs, and more. You can focus on making the space you have as efficient as possible, and stop paying for what’s not actually needed to help your business thrive.
5. AN EFFECTIVE WAY TO IDENTIFY PROBLEMS
When you improve your supply chain management, you make it much easier to avoid problems and delays.
This is because you’ve effectively streamlined communication between all the different vendors and companies that you work with in order to get your products out to your customers.
So, if there’s a slow-down at any part of the process, you’ll be able to pinpoint exactly where things are going wrong right away. You’ll know where every pallet is at all times, so even if there is an issue, you can solve it much faster than you would if you had to track it down on your own.
6. A DEEPER UNDERSTANDING OF CONSUMER DEMAND
Let’s face it — in today’s world especially, consumer demand and interest can change at the speed of light.
While certain products that you sell are especially hot, the right SCM system can ensure that your inventory levels are consistent with the demands of your markets.
But it can also help you to identify changes in what your market wants through the collection and interpretation of real-time consumer data. You can track inventory levels not just to see what’s selling, but also to see what isn’t.
When a product is becoming less popular than it normally is, you can get ahead of any potential lulls in your business by immediately starting to strategize ways to improve upon it or think about developing new products that are more consistent with the current needs of your market.
SCM helps you to get a better grasp on product lifecycle management, and can even use predictive analytics to help you avoid a potential profit loss.
Consumers want to work with companies that prove they’re able to change with the times. Perhaps one of the biggest benefits of supply chain management is that it can help your company to do exactly that.
READY TO SEE THE BENEFITS OF SUPPLY CHAIN MANAGEMENT FOR YOURSELF?
We know that this post has you seriously excited about reaping all of the benefits of supply chain management.
When you improve your SCM system, you don’t just give your customer relations a boost, lower your operating costs, and ensure that your small business runs as efficiently as is possible.
You also improve your company’s entire reputation, whether you now have more time and money to devote to product development, or if it means you can offer consumers better deals and ensure that they get the correct products as soon as possible.
At MT Purchasing, we believe that small businesses especially can greatly benefit from the power of group purchasing.
It allows you to lower your sourcing costs by taking advantage of companies who are able to make bigger purchases from suppliers. It lets suppliers know that you’ll be monitoring their efficiency and activity.
It can do all that and much more.
When you’re ready to learn how group purchasing can boost your business, reach out to us to get started.