Why is supply chain management important?
- It meets the organizational objectives of timely availability of desired resources.
- Sets criteria to meet the assigned targets of resource availability.
- Opportunity to select reliable external providers inform of suppliers, vendors, contractor and outsourcing agents.
- Peace of mind.
- Smooth customer deliveries.
REDUCE OPERATING COSTS
- Decreases Purchasing Cost – Retailors depend on supply chains to quickly distribute costly products to avoid sitting on expensive inventories.
- Decrease Production Cost – Any delay in production can cost a company ten of thousands of dollars. This factor makes supply chain management ever more important. Reliable delivery of materials to assembly plants avoids any costly delays in manufacturing.
- Decrease Total Supply Chain Cost – Wholesale manufacturers and retailer suppliers depend on proficient supply chain management to design a network that meets customer service goals. This gives businesses a competitive edge in the marketplace.
Improve Financial Position
- Insert Profit Leverage – Businesses value supply chain managers because they help control and decrease supply chain expenditures.
- Decrease Fixed Assets – Supply chain managers decrease the use of large fixed assets such as plants, warehouses, and transportation vehicles, essentially diminishing cost.
- Increases Cash Flow – Firms appreciate the added value supply chain management contributes to the speed of product flows to customers.