From Concept to Customer: Supply Chain Management

The 21st century consumer is spoilt for choice when it comes to shopping for goods and services; and there is certainly a wide range of products to choose from, whatever the occasion.

But it’s probably fair to say that very few people ever stop to consider how the goods actually end up in their current form in the first place; from an idea in someone’s head to the factory floor, then transported on the back of a truck and taken to their local department store. Indeed, from a customer’s point of view, there is probably very little reason to ever consider the journey a product has taken to get to their front room.

However, from a business point of view, managing and monitoring a product’s journey is integral to the company’s long-term success. What's more, streamlining the process to minimise costs and delays will help to ensure the supply chain is optimised to their own benefit.

Indeed, the main underlying objective of supply chain management (SCM) is to meet the demands of the consumer through efficient use of all resources involved in moving the product or service, from the supplier to the customer. There are, however, many mechanisms in place to ensure that the SCM process runs smoothly from start to finish. This includes clear communication between suppliers to eliminate bottlenecks, and also strategic sourcing to ensure the right balance is struck between material costs and the quality of goods on offer.

But whilst supply chain management requires businesses at every level of the process to cooperate fully with each other, the ultimate goal of individual companies is to fulfil their immediate obligations in moving the product on to the next stage in its journey. As such, any tool of the trade will do if it helps them manage the often complex procedures involved in SCM, thereby increasing their profitability, competitiveness and subsequently, their growth.

And this is why many companies are turning to supply chain management software. Indeed, such software has specialised functionality to help companies effectively manage and coordinate the processes involved in collaborating between manufacturers, retailers and transportation/logistics service providers. SCM software also often includes useful features that help to facilitate purchase order processing, inventory management and supplier management/sourcing.

However, at the more sophisticated end of the SCM software spectrum, some have forecasting functionality built in, which can be a very valuable feature. Given that it can often be difficult to predict future consumer trends, there can often be a significant gap between supply and demand; through using algorithms and performing consumption analysis, forecasting tools can help businesses plan more efficiently for their future requirements.

So, whilst the customer may not be overly-concerned with the processes involved in moving a product concept to the shop floor, businesses stand to gain a lot from understanding and managing the supply chain effectively.