At some point in our life we must have faced this question: “Where did you get this from?” There are so many ways to answer this question. No matter what your answer is, none of the things you have will just come to you out of nowhere. They have to first come out from raw store into the packaged one you buy from the store or they have to go through a process called Supply Chain. So, what is Supply chain? Why is it so important in business or startup? To conduct a good business or to get customers satisfaction you really need to have a clear understanding of Supply Chain Management (SCM) and how it works.
Everything you need has been available to you because of supply chain. Supply chain management is a highly comprehensive system used by small and large business companies with a view to get products to buyer, from raw material, manufacturing and delivering the final products to customer or we can say that an application of products which reaches to customer and reflects the effort and sensibility of the company is supply chain. Good supply chain management will lead your business to prosperity. In recent times SCM has changed enormously which has brought transformation in the world of e-commerce. SCM has created lots of job facilities for young generations. Many well-known companies also need help in the field of supply chain. Many great startups have been mentioned and all of them bring a huge value and change to the supply management world. Lukasz Kozicki, CEO at NextBuy (2013- present) said that, “I’ve been in supply chain management and procurement for a couple of years and I am also an entrepreneur connected to the procurement IT area. I can clearly see the huge change going in the industry regarding company digitalization and user-friendly SaaS solutions”. SCM is the active combination and integration of all activities to provide you with the best value. Best value stands for providing customers with good quality of products in reasonable price. If you give customers best value, the customer’s satisfaction will increase. In this way your business will grow fast.
Importance of Supply Chain
SCM works like a backbone of a company which solves the critical issues of business such as environmental loss and global expansion. It helps the company to reach their goals with low costing and at the same time to please the customer with good quality products. So it plays a vital role in business.
Reduce Operating Costs
- Decreases purchasing costs.
- Decreases manufacturing costs.
- Decreases total supply chain costs.
Improve Financial Position
- Increases profit supply.
- Decreases fixed assets.
- Increases cash flow.
- Increases profit margin.
Boost Customer Service
- Improves product quality.
- Improves customer satisfaction.
Startups and Supply Chain
New supply chain visibility technology encourages fast response to change by allowing privileged users to take action or redirect supply. Fully merged supply chains see 20% more efficiency than those without. The value of autonomous and merged supply chains are huge, which speaks for itself. In recent reports it has depicted that 90% of the supply chain reinvention survey respondents with autonomous supply chains reported their market share dramatically increased in the past years, 97% reported their customer satisfaction. Today the world is multi-tired, multi-supplier and collaborative. Different parts and elements of products can be spread over many thousands of kilometers, and at times it can be difficult to simply track where everything is. This kind of situation is more than frustrating and which can lead you to huge loss in your business. This is where new options for increased supply chain come in. According to Diversified Industrials Global Sector Chair Jeff Dobbs stated that “Obtaining real time visibility across all tiers in the supply chain significantly increase speed to market, reduce capital expenditures and manage risk”. He also stated that “Moving toward a demand driven supply chain is probably the single most important step a global manufacturer can take today.”
The success of your business links inextricably to the performance of your supply chain. If you want to run a business you have to make sure you supply chain is running smoothly. If you want to be sure your business will be not just surviving, but thriving over the next five years and beyond, your supply chain must be at the center of management attention.
Written by Tazrian Alam
Member, Startup Chattogram