The liberalisation of FDI rules and implementation of Goods and Services Tax in the Indian economy spurred growth across various industrial sectors. Simultaneously, supply chain reforms like ‘Make in India’ endeavours now provide additional backup for the same. The emergence of a new revolution in supply chain brought in immense scope for investments, and hence, gave rise to new business ventures.
While this industry had a positive impact on diverse sectors irrespective of their genre of trade, India’s economy continued receiving a substantial boost from its business sectors. These schemes and easier financial assistance options are helping businesses maintain an optimum and updated supply chain. Carrying out business endeavours has become more convenient and resulting in a positive cash flow. Thus, having an in-depth idea about what is supply chain management is imperative to compete in the networked economy and a globally competitive market.
Definition of supply chain management (SCM)
Supply Chain Management comprises of the holistic approach to manage the flow of services, goods, and information from suppliers, via manufacturing warehouses and factories, to end-customers. However, evolving demands and requirements of customers led to the recent modifications introduced to this management chain. At present, the major focus is on optimisation of core activities that would help streamline the entire process and hence cater to customer requirements better.
Now that you know what is supply chain management check out its functioning –
How does supply chain management work?
As India continues its stride in the global business market, it becomes essential to optimise this management chain accordingly. It would not just help smoothen the functioning of the various sectors involved in a trade, but also make it less time-consuming, hassle-free, and inexpensive. As per recent surveys, about 79% of high-performing organisations continue to achieve higher growth in their revenue as against those with an average supply chain management.
Understanding supply chain management and knowing its importance and process is crucial to maintain a smooth/sound flow of business. Mentioned below are a few steps involved in its functioning –
- Planning –
This stage includes concentrating on developing the blueprint of a business. It consists of 3 types of planning – strategic, demand, and supply process. Planning starts with the availability of key components required to meet customisable requirements of customers. This phase also includes arranging for substantial supply chain finance that would help individuals meet their professional financial goals.
Entrepreneurs, irrespective of the size and genre of their trade, are often in requirement of funds and hence avail Business Loan from reputed lenders like Bajaj Finserv. Their advances come with an attractive rate of interest as well as additional borrower-friendly features including Flexi Loan facility and online account management. Also, these credits come with other beneficial features like high-value loan amount, flexible tenors, pre-defined minimum eligibility criteria and nominal documentation.
- Source –
Following the planning procedure, the focus must shift to the choice of suppliers for raw materials. An efficient tracking system is essential to ensure the timely delivery of such inputs in production.
- Manufacturing –
It includes detailed scheduling, manufacturing execution, and production planning. Manufactured products will be ready for warehousing and delivery to end-users after testing and packaging.
- Product movement –
The scheduled movement of products from one unit to the other (manufacturing or warehouse to distributors) requires efficient management for the necessary success. Thus, on-point and quick delivery caters to specific client requirements and improves a business’s clientele.
- Delivery to end-customers –
Supply chain managers need to be particular about modern IT tools to track networks of warehousing, invoice and payment receipts, and the inventory models. Following this, they should be efficient in the delivery of products and services at the right time and place, and in required quantities.
- Post-delivery services –
Process and functioning of supply chain management ends with the handling of returns, which is included in post-delivery services. It includes reviewing returned products, maintaining inventory, deploying sources for faster return and quicker replacements.
Thus, one should necessarily know what is supply chain management and adapt the recent, relevant updates to leverage profit, reduce operating costs, boost customer service, and increase the flow of cash.