What is Supply Chain Management, and Why is it Important?

Supply change management is a highly-detailed system used by small and large organizations alike to get products to consumers, from obtaining raw materials, manufacturing and delivering the final product to the customer. A well-organized supply chain management system involves optimizing operations functionality to be fast and efficient.

What is Supply Chain Management?

Supply chain management in not only a process served to generate a cost reduction in the budget or a mission to create greater operational efficiencies within an organization. While these are a part of the whole ecosystem, modern supply change management encompasses the strategic alignment of end-to-end business processes to realize market and economic value, as well as giving a firm the competitive advantage over their business rivals.

In recent times, the dawn of the digital age has brought wholesale transformation to the world of commerce. Only twenty years ago, these processes were arduous, labor intensive, time consuming and disorganized. It now may seem like ancient history, delivery times have gone from two weeks to a month down to a turnaround of hours in some cases. Automated systems and high-speed communication have paved the way for supply chain management and its increased demand.

Why is Supply Chain Management So Important?

Today, more than ever before, supply chain management has become an integral part of business and is essential to any company’s success and customer satisfaction. Supply chain management has the power to boost customer service, reduce operating costs and improve the financial standing of a company, but how does this work?

Improve Customer Services

  • Customers expect to receive the correct product mix and quantity to be delivered on time. For example, if you buy five books from Amazon and only two of the actual titles arrive, one is an entirely different book and two are missing, the customer will lose faith in Amazon, prompting them to leave a bad review and hinder them from returning to the platform.
  • Products need to be on hand in the right location. Customer satisfaction is tarnished if your car’s brake pads fail and the auto repair shop is delayed in making the repairs because parts are not available in-house.
  • Follow up support after a sale must be done quickly. When an appliance store sells a furnace with a warranty and it breaks down when temperatures are below freezing, it is a great possibility the customer will be irate if the heating unit cannot be fixed immediately.

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 tens 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.

What Can You Do with a Supply Chain Management Degree?

The Master degree in Operations and Supply Chain Management is designed to provide students with a fundamental understanding of company supply chain management from a global perspective, with an emphasis on leveraging the effects of the operations and supply chain management on business performance and objectives. The program will prepare supply chain managers who will be able to work in Europe, Asia, Latin America, and other regions around the world. Graduates will be able to help companies build a competitive edge based on high levels of technical and managerial competence gained on the job and in the classroom.

The Master in Operations Management and Supply Chain Management degree courses at GBSB Global Business School aim for a high level of integration between management techniques and the technologies that they control, with emphasis on the strategic decision-making and international supply chain management across borders. Topics include global supply chain design and management, global project management, quality management, and financial management.

Students who chose to earn a Master in Operations and Supply Chain Management degree are often pursuing management or consulting positions in Europe and around the world in supply chain management, operations management, manufacturing, purchasing, or related fields.

Are you interested in finding out more information about career opportunities in supply chain management and if this is the right discipline for you? Read this post or contact us.

Written by Emily Dawn Szajda, GBSB Content Manager

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