Supply chain management is one of the key processes to achieve an organisation’s business objectives. For some industries, it is the most important facet around which the key operations revolve. The complexity of dealing with key personnel, supply & demand of assets increases with the growth of a company. Dealing with them in the most efficient manner to maximise utilisation of resources, reduce time lag between demand & supply & ultimately having accurate data to predict things can generate tremendous value for a company. All this can be done with automation of your supply chain management. The introduction of IT can help an organisation to benchmark its SCM with best practices tailored to their needs. A good Supply chain management will ensure the following:
1. Realtime Inventory status & Asset utilisation :
It is imperative to have a realtime status of inventory items before any procurement is done. A good SCM implementation will ensure that there are no unutilised resources. The procurement takes into account what exists in the inventory & accordingly new items are purchased.
2. Reduce time lag between demand & Supply :
In large organisations, significant time is taken to complete the procurement process. The requests are routed to the procurement managers, which may involve several approvals before the purchase is finalised. At times when there is a critical requirement, an automated SCM reduces the time lag required for the purchase. The lifecycle of procurement is simplified leading to quicker availability of key items.
3. Collaboration with Vendors :
The vendors are an integral part of the SCM. A system that can automate the functionality where vendors can submit quotations, send shipment information & also replace any faulty inventory makes the procurement very efficient.
4. Predictive analysis & proactive alerts for items :
The demand & supply of items is not linear in most organisations. For e.g. in an ecommerce portal, there may be peak demands during special offers, it is difficult to manage the demand of the items without predictive algorithms. These are designed to predict loads during peak seasons or times leading to optimised inventory to meet peak demands.
5. Vendor rating & performance management :
Vendor rating & performance management helps to improve the product quality & track the received items in an organisation. If a vendor delays the delivery of the items or doesn’t meet the quality guidelines then the same can be tracked. The performance evaluation of vendors helps in enforcing quality checks for the goods, reduces delay & helps in strict adherence to terms & conditions in the contract.
6. Track all steps & status of procurement :
Automation of SCM processes leads to better outcomes & predictable results. Right from the time, an inventory item is requested to the point it is delivered and alloted to an employee. All the intermediate steps involved from the time a request for quotation is sent to the vendors, quotation submission by vendors, comparison of quotations, creating purchase order, finalising payment terms & accepting the delivery of goods. The whole process from procure to pay is optimised with digitisation of SCM.
7. Cost Reduction :
The procurement costs can be tracked & monitored for an organisation. Excess inventory & unutilised assets are reported to the management with proactive alerts. Any discrepancy in cost, deliverables or product quality can be immediately notified to the concerned authorities with a good SCM solution. There is significant reduction of cost & improvement in asset utilisation. Analytics & business intelligence also help in figuring out any anomalies.
The supply chain management solution is the key to operational efficiency of a company. Choosing the right partner for implementation of SCM solution can enable an organisation to uncover hidden opportunities, improve service efficiency, optimize inventory and increase transparency. A good SCM also acts as a growth engine for meeting the business objectives of an organisation.