Supply Chain Management

Introduction:

The process of planning, implementing, and controlling the supply chain is known as supply chain management. It involves the control of finished goods from their origin to their consumption. The traditional supply chains involved at least two companies that were connected in a way that allowed for the connection between customers and suppliers. This traditional method means that the finished goods are delivered to the customer by a network of distributors.

The advantages of supply chain management

One advantage of supply-chain management is the sharing of valuable information. This information includes demand forecasts, sales forecasts, and transportation information. As a result, the chains will be more efficient, and will have lower production costs, giving them competitive advantages over other companies.

Supply Chain Management

Supply chain management can improve productivity and efficiency. It is more efficient than traditional chain management. SCM ( supply management) improves the firm’s processes. This improves quality control and inventory management. This in turn increases productivity and efficiency. The reduction of goods costs can result in increased efficiency. This can be achieved by sourcing cheaper raw materials.

The supply chain management can also lower the firm’s transport duties and taxes. As a result, these duties will be reduced which in turn results in a reduction of the final price and cost of goods. There is less transport error between firms when there is sharing of transportation duties. This chain management will ensure that goods are delivered quickly and efficiently, which will increase customer loyalty.

Another advantage is that firms can reduce bad debts by having well-organized and defined payment terms. This ensures that a firm doesn’t accumulate bad debts as the payment terms among firms are well-defined and maintained by all firms involved in the supply chain.

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The disadvantages of supply chain management

Supply Chain Management

The supply chain management has many advantages, but there are also disadvantages. The issue of employment is one of the disadvantages. Traditional supply chain management was manned by salesmen and other managers. However, there have been high unemployment rates in many countries after the introduction this supply chain management. This has led to increased unemployment, despite the fact that this management system provides a more efficient and effective way to achieve the firm’s objectives.

Another disadvantage is the complexity of initializing supply chain management , which requires firms to invest more capital. This method is more expensive and more complex than the traditional one. This method is also expensive because it involves the management of many activities within the company.

How supply chain management can impact economics

The concept of supply chain management has been transformed. Complementary firms that depend on one another are now being seen as one organization. They share information about forecasts and market trends. Consumers now get low-priced products because the firms lower the price of goods sold. Firms are also enjoying high levels of profit as they manage the supply chain.

Conclusion:

Supply Chain Management

Supply chain management can be more beneficial than traditional supply chain management for a company. The supply chain management strategy gives firms an edge over those who don’t adopt this strategy. The increased efficiency of their transactions leads to higher profits for the firms.

Supply chain management is more effective than traditional chain management because suppliers share valuable information. This will make the chain more efficient, which will result in lower production costs and competitive advantages for the companies in it.

It improves productivity and efficiency within a company. This improves quality control and inventory control which in turn increases productivity and efficiency. It reduces transport duties, which includes the shipping and transportation duties that are shared between firms. This results in a reduction of costs and lower final prices for goods.

Supply Chain Management

Supply Chain Management

References:

Birgit Jespersen and Tage Larsen, Supply Chain Management: Theory & Practice, Copenhagen Business School Press. Denmark