Evolution of Supply Chain Management in a Business Landscape

Supply Chain Management plays an important role in this forever-changing and highly competitive business landscape. It ensures operational efficiency, customer satisfaction, and overall business success. It has become crucial for organisations to proactively embrace the changes occurring in the business world due to technological advancement, globalisation, and high customer demands. This article explores the forever-changing business landscape, the key role to supply chain management opportunities, and challenges related to supply chain management. 

What is Supply Chain Management?

The term “supply chain management” refers to coordinating and integrating all activities involved in moving goods, services, information, and finances from their origins to their destinations. It involves planning, executing, and controlling various processes, including procurement, production, inventory management, transportation, and distribution.

The main aim of supply chain management is to keep a check on the overall efficiency of the activities involved in the supply chain while meeting the demand of the customers and managing the cost & profit.

The Changing Business Landscape:

With the increase in market competition, technological advancement, globalisation, and rapid customer demand, evolution has become necessary for the business landscape. Companies face pressure to provide goods and services faster while managing the cost and quality. Additionally, the growing customer demands require a more agile and responsive supply chain management approach.

The Role of Supply Chain Management:

In the past, procurement, production, and distribution were the major functions that were involved in supply chain management, but today’s increasing demand has made businesses use it for not just the basic function but for strategic planning and risk management as well. With the correct use of supply chain management, businesses can ensure proper coordination with suppliers, manufacturers, distributors, and consumers. Here is the role of supply chain management in detail:

Coordination and Implementation

Supply chain management includes properly implementing and coordinating all the procedures involved in a supply chain. It involves managing good relationships with suppliers, manufacturers, distributors, and customers. 

Strategic planning

Supply chain management is important in strategising and defining long-term goals, objectives, and direction. Decision-making related to business strategies, production capacity, inventory management, and more comes under supply chain management.

Supplier Management

Supply change management is responsible for collecting essential materials and services from the suppliers and delivering them to the customers. This involves creating contracts for negotiation, managing relationships with the people involved, and ensuring cost-efficient and timely delivery to support customer demand.

Logistics and transportation

In a business, supply chain management is vital in arranging logistics and transportation-related activities. This involves transporting primary goods to the supplier and delivering the final product or service to the customer. 

Risk management

Managing risks or uncertainties that can impact the supply chain also comes under supply chain management. It involves identifying the potential risks in the near future, developing a strategy and plans to resolve or overcome the issue, and maintaining a continuous supply chain. 

Performance management and improvement

The supply chain management technique is extremely useful for monitoring the key performance indicators (KPIs) to understand the supply chain’s effectiveness and the business’s overall growth. It includes studying past data, areas of improvement, and ways to reduce costs and enhance customer experience.

You can learn more about the different roles of Supply Chain Management in detail from the book ‘Supply Chain Management For Dummies,’ available on Ubuy India.

Challenges Related to Supply Chain Management:

Supply chain management is very important to grow a business model but comes with challenges and complexities. Here are some of the key challenges one may need to overcome to maintain a good supply chain.

Complexity Due to Globalisation

Due to the expansion of globalisation, the supply chain has also expanded across borders and complexities related to diverse market conditions, regulatory requirements, and cultural diversity. Conducting and maintaining a supply chain at a global level requires overcoming logistical issues and maintaining coordination.

Challenges occurring due to technological integration

Artificial intelligence and blockchain have created a requirement for investments, expertise, and change management to implement it in the business model, making it difficult for many entrepreneurs to head-start the business independently.

Supply Chain Disruptions

The supply chain is vulnerable and can be disrupted by various factors such as natural disasters, trade conflicts, or supplier failures. Maintaining a continuous flow to the supply chain is a crucial part of any business. It involves strategic planning and proper proactive risk management.

Opportunities with Supply Chain Management:

Overcoming obstacles and seizing opportunities requires a proactive approach to supply chain management. Using the technique properly can enhance efficiency and customer satisfaction. Here are some key opportunities:

Collaborations

Supply chain management allows you to collaborate with various supply chain partners, resulting in more efficiency and innovation. Proper supply chain management can help you foster strong partnerships, share information, reduce costs, and improve overall supply chain coordination.

Digitalisation and Data Analytics

With digitalisation in supply chain management, one can access a vast amount of data and advanced analytics, which provides an opportunity to gain deeper knowledge about supply chain operations, customer behaviour, and market trends. It forecasts accuracy and helps in making informed decisions.

Omnichannel Strategies

These business strategies allow enhanced customer experience through multiple channels. Growth in omnichannel retailing has offered various opportunities for supply chain managers to optimise their operations. 

In conclusion, with the rapid changes in the business landscape, supply chain management has become crucial, and recognising its importance can help a business thrive in today’s competitive market. It provides various opportunities like collaboration with various supply chain partners, better data analysis, and opportunities related to omnichannel retailing to make a business flourish. 

Supply chain management has become extremely useful for risk management, strategic planning, monitoring performance, and logistics and transportation management, implying that it holds great potential and can make a business stay ahead.

Author Fahad Khan:

Fahad Khan is a Product Manager and digital marketing enthusiast who works at Ubuy. Content marketing, PPC, email, and social media marketing are among his areas of expertise. He has been exploring the field of digital marketing to share his pearls of wisdom with the whole world. He enjoys working on different niches and creating valuable content for readers.