What Are the Economic Benefits of the Supply Chain?
Whether you own a startup or a large corporation, the economic advantages of an effective supply chain are limitless. Here are some of the main benefits of supply chain management.
Whether they are very small companies subject to strong competition or multinational companies that are leaders in their field, it is essential for them to convert their resources into competitive advantages through optimal supply chain management. So, what are the advantages of a company becoming involved in the management of its supply chain?
Supply Chain and Performance Optimization
Nowadays, it is vital for a company to have an efficient supply chain. Indeed, the absence of an effective supply chain can create an increase in transport and delivery costs, or an increase in stocks, which implies a drop-in profit because the management of large stocks has an equally high cost. For any business looking for growth, that can be tragic. For example, in 2021, Apple announced a loss of $6 billion in revenue linked to disruptions in its supply chain in the third quarter.
An efficient supply chain perfectly manages each network necessary for the proper functioning of the company's logistics. But the supply chain is not just limited to that. It takes care of ensuring that each network is perfectly interconnected. The supply chain also allows a company to better optimize its logistics costs. Indeed, it enables knowing the exact costs associated with each step of the process and thus making strategic decisions in relation to them. But many companies are unaware of the importance of the supply chain as some startling data shows.
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Agility Is Key for an Efficient Supply Chain
Although the three essential ingredients of a resilient supply chain – short cycle, reactivity, and link redundancy – all contribute to its agility, they are only prerequisites. On a daily basis, this is accomplished by managing operations that are both precise and fast. This management is based on an end-to-end shared database, teams empowered to make decisions as close to the action as possible, and a culture of operational excellence at the customer's service.
The digitization of the supply chain is the foundation of agile operations management: it visualizes the entire chain for quick and relevant decision-making. Where are my containers? How much stock does my customer have? Is my factory producing at the appropriate rate? What are the sales trends for our newest product line? So much information that you can use to make a decision.
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