The Importance of Supply Chain Management

9/7/21 10:30 AM

supply chain management is important for manufacturing organizations

No matter the size of the company, supply chain management should be a priority for all executives to improve their chances of success. Supply chain management in manufacturing can be defined as “the integration of key business processes from end-users to suppliers that provide products and services to add value to customers”. These processes involve managing the movement of materials and products throughout the organization while maximizing customer value and achieving a sustainable competitive advantage. 

The success of a manufacturing organization is highly dependent on the success of the supply chain as a whole. All components of the supply chain play a role in setting the demand for certain items then supplying materials to produce those items and fulfill customer orders. If any link in the chain is weak or is disrupted, the entire chain could be at risk.

weak links in the supply chain can disrupt the entire chain

There are usually two main processes within the supply chain. The first is materials management which is the business process of acquiring and storing raw materials and other parts. The second is the process of physical distribution which is concerned with getting products to the customers and satisfying their expectations. 

Overall, supply chain management encompasses the design, planning, execution, control, and monitoring of supply chain activities to ensure that goods and services are delivered to your customers in a timely manner for the lowest cost. The following blog will outline some of the main benefits of why supply chain management is important for your manufacturing operation.

Importance of Supply Chain Management

The main reasons for the importance of supply chain management includes the following:

  • Reduced Costs - Supply chain managers are often focused on reducing the costs incurred at all steps within the supply chain. Improving production processes, relationships with suppliers, and inventory management are some of the ways that supply chain managers can attempt to further reduce costs. The overall benefit of reducing costs throughout the supply chain is an increase in firm profits. Even reducing the cost of items by a few cents can result in millions of dollars saved if you
  • Interconnected Supply Chain - Supply chains can appear like independent strings of a few companies working together to reach a common goal of delivering products to consumers. However, it is much more complex than that as the world can easily be viewed as one large supply chain. Consumers, distributors, producers, and suppliers are consistently communicating with each other as materials and components are transformed into finished goods that ultimately end up in the hands of consumers. It is therefore crucial for supply chain managers to focus on visibility and communication between all components as well as on the growth of their organization, partnerships, and outsourcing.
  • Information Transfer and Communication - Supply chain management (SCM) is a necessity for the foundation of all societies. Effective communication and information transfer in real-time is a necessity for the foundation of a robust supply chain. This starts by building strong relationships between all components of the supply chain and ensuring that communication is easy and that all parties are aligned towards a common goal. As information flows backwards from the end-consumer to the supplier, supply chain managers must reduce any delays or errors in the information that is transferred from one chain link to another. Many modern manufacturers are relying on advanced technology that can increase the visibility of order statuses to both consumers and suppliers in real-time to meet everyone’s needs.
  • Better Customer Service - Effective supply chain management can provide direct improvement to your customer service. This is because SCM processes will ensure that the correct quantity of the correct items will be delivered in a timely manner. Having an interconnected network of suppliers and distributors will reduce delays and improve customer satisfaction. In addition, supply chain management will usually increase visibility and allow both customers and customer service personnel to know of the status of each order at all times. 
  • Agility - Supply chain management is important to allow organizations to remain agile and be able to handle any unexpected issue or variability that may occur. By streamlining supply chain processes and increasing visibility, businesses will be able to diagnose problems and find appropriate solutions more quickly. In addition, having contingency plans and what-if scenario analyses of your production schedule will allow you to quickly evaluate your options and find the best solution for your company, 

A software that can aid with your overall supply chain is PlanetTogether’s Advanced Planning and Scheduling Software (APS). PlanetTogether is a visual scheduling software that allows you to have a clear representation of your production process. This allows you to quickly identify areas that are in need of productivity enhancement or constraint management.

PlanetTogether APS is a necessity for manufacturing operations that are looking to take their production up a notch, increase productivity, decrease costs, and deliver goods on time. Advanced Planning and Scheduling software is being implemented into manufacturing operations around the globe and is helping make the planet more productive, one factory at a time.

Customers enjoy the freedom and ability to go in and do a visual check on our operations. The information is quickly communicated without the bottleneck of the scheduler and all jobs are completely visible.



Advanced Planning and Scheduling (APS) Software

Advanced Planning and Scheduling Softwares have become a must for modern-day manufacturing operations as customer demand for increased product assortment, fast delivery, and downward cost pressures become prevalent. These systems help planners save time while providing greater agility in updating ever-changing priorities, production schedules, and inventory plans. APS Systems can be quickly integrated with an ERP/MRP software to fill the gaps where these systems lack planning and scheduling flexibility, accuracy, and efficiency.

With PlanetTogether APS you can:

  • Create optimized schedules that balance production efficiency and delivery performance
  • Maximize throughput on bottleneck resources to increase revenue
  • Synchronize supply with demand to reduce inventories
  • Provide company-wide visibility to resource capacity
  • Enable scenario data-driven decision making

The implementation of an Advanced Planning and Scheduling (APS) Software will take your manufacturing operations to the next level of production efficiency by taking advantage of the operational data you already possess in your ERP system. APS is a step in the right direction of efficiency and lean manufacturing production enhancement. Try out a free trial or demo!

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Topics: supply chain, supply chain management software


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