The Benefits of Real Time Supply Chain Management Solutions
In business, supply chain management, refers to the motion and storage of materials, and all stages of production through to delivery of final goods at the desired location. The supply chain is essential to the competitiveness of any business. Therefore, the key to improving supply chain management is understanding it well and implementing it correctly. If the supply chain is not properly managed, it can lead to:
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Cost cutting A major factor in supply chain management is controlling costs associated with the supply chain. This is done by minimizing the number of trips that suppliers take to get raw materials, or by improving the efficiency at which suppliers store their products, or both. For example, some suppliers can improve the quality of raw materials by storing them closer to the customer. Others may process the raw materials more quickly, while others may use less efficient machinery. A supply chain should therefore be evaluated based on its level of efficiency and cost reduction.
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Improved productivity Effective supply chain management involves effective transport systems. There are two types of logistics, namely supply chain processes and logistics processes. Supply chain processes are those that involve customer-to-manufacturer interactions, and logistics processes are those involving supplier-to-retail interactions. The objective of supply chain management is to improve productivity by streamlining processes, ensuring information is available at all times, reducing inventory waste and improving customer service.
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Increased profitability — Apart from cost reduction, one of the objectives of supply chain management is improved profitability. Many companies have successfully reduced cost of production through supply chain efficiencies. For example, semiconductor companies have reduced the average cost of manufacturing by more than 40%. The advantages of digital supply chains are numerous. Companies in need of a more streamlined supply chain can use their knowledge and experience to develop products that are more competitive. They can also use digital supply chains to partner with other companies to create a better global supply chain.
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Real-time planning — The advantages of supply chain management go way beyond cost reduction. Companies have the ability to plan for changes in their real-time environment. In today’s economy, companies cannot afford to sit on their laurels. Connected supply chain planning allows them to make informed decisions on business strategies that are relevant to the current environment.
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Shared infrastructure — One of the major benefits of connected supply chain management is the creation of a more efficient global supply chain. One important component is the establishment of common business infrastructure. By getting their resources and expertise from the same company, logistics operators are able to streamline operations and share information that will help them increase efficiency and cut costs. Furthermore, logistics partners who are located close to each other also share operational information with one another. This leads to a decreased need for physical travel and creates a cost-effective solution. This also has the added benefit of reducing the negative environmental impact of shipping goods internationally.
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Reduced reporting requirements — Another important advantage of real-time supply chain management is the ability to monitor activities in real time. These reports show the up-time status of shipments and the locations where they are located. Companies that are experiencing problems with their supply chains can view detailed reports about the activities that are causing delays. In addition to providing up-to-date information, these reports allow companies to establish goals for improving their processes and identify areas that require additional attention in order to achieve positive results. Furthermore, companies can see if there is a problem with a specific process and the root cause of such problems can be pinpointed so they can address the issue accordingly.
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Improved accuracy — With real-time supply chain management solutions, companies can greatly improve their accuracy with supply chain management reporting requirements. In the past, tracking of processes and activities was difficult since it required human interpretation of information. However, with the help of computers and the internet, companies can now translate activities and track their progress in an efficient manner. Moreover, when processes are monitored and tracked in this manner, they are much easier to understand and analyze. Also, because the system is interactive, processes can be carried out as per the user’s preferences, leading to improved efficiency and customer satisfaction.
