At first, the whole term supply chain management might sound like a really complex business-related thing, but keep in mind that this is precisely something that keeps today’s modern world running, you know? For example, every product you see around you that you bought somewhere, well, to get that product to you, there actually was a supply chain. And managing this supply chain is what we call SCM aka Supply Chain Management, simple as that. Sure enough, it is a super important thing but not without its cons or challenges. Worry not though, here we will also go over the possible advantages and disadvantages of supply chain management. Alright, here we go.
Advantages Of Supply Chain Management
1. Smooth Operations And Smooth Scaling, What Else You Want?
One thing we are pretty certain of is that if you really want everything to go as planned and as smoothly as possible, you should definitely trust SCM. Why? Well, just so you know, by streamlining every step of the process, from sourcing raw materials to delivering the final product, SCM cuts down on a lot of different things to make sure everything is not just effective but running smoothly as well.
2. Cutting Costs Super Effectively
Coming in at 2nd best position, well, one of the biggest benefits of SCM is its ability to save money across the board. With better planning and coordination, businesses avoid spending way too much on things like keeping too much inventory or rushing deliveries, you know? This is how you cut down on costs, and it surely makes a big difference down the line.
3. Happy Customers, Happy Business, Right?
Sure enough, when your supply chain is running efficiently, customers notice, and why shouldn’t they though? Like, faster delivery, fewer mistakes, and high-quality products all lead to happier customers. They’re less likely to return items, more likely to trust your brand, and even more likely to recommend your business to others, don’t you think?
4. Get Even Better With Suppliers
Because it is super important, yes, companies in supply chain management use technology, collaboration, and trust to build relationships with suppliers because that’s what you should be doing to scale things up, right? Well, it is more likely that these suppliers will deliver quickly when they’re treated nicely and with respect, right? And without a single doubt, they will surely be there for you in times of need.
5. Want More Profits Without Too Much Efforts? Here!
Sure enough, the major part of this is that companies sell their goods faster and at a better price than before. Just suppose you have an eye on the product and risk the most complete process of the invention before causing the risk to come, how does that sound? Well, for sure, SCM reduces waste and optimizes the approach at every level of delivery so customers promote the project together with their companies, thus, they also generate more sales.
6. Know What’s Happening Everywhere, Financially
Just so you know, yes, SCM is much better when you really want to know where things are going and where things stand financially, like how effective each process is and how much financial gain you’re having. We’re talking about all that. And no one can deny the fact that having this level of clarity lets businesses do more that makes a difference, and cut down on things that are not that important. Simple as that.
Disadvantages Of Supply Chain Management
1. Sure Enough, It’s Kinda Expensive
One thing you should not be looking over is that initially, the implementation of supply chain management (SCM) costs way too much actually. Like, buying and putting up the software, and tools, and possibly implementing new technology, which are crucial for the successful running of the business, need to be prioritized, and without that, you can’t do much. And sure enough, these things cost way too much, so don’t expect to jump into it when you’re not financially stable or capable.
2. It’s Complicated (Really Complicated)
To put it simply, the management of the supply chain (SCM) means juggling a number of parts on the move at once, like, raw materials, suppliers, manufacturers, deliveries, and customers. All these components’ management is both kinda tedious and surely time-consuming. Sure enough, the more complex your supply chain, the more difficult it is to seamlessly run everything and the smallest mistakes can cause shipping to the entire project.
3. What When Things Go Wrong?
Never forget that unpredictable events such as natural catastrophes, political issues, or the failure of a supplier can disrupt the supply chain. To give you a perspective of that, well, as an illustration, if one vital supplier closed down, it could influence the manufacturing of your products negatively. The company might not have the backup plans to handle that, which would then lead to chaos.
4. Then There Is The Digital Dependency
By this point, you may already know that SCM is about technology, high dependency, and the challenging cycle that comes with it, right? And sure enough, a hacker can launch an attack and expose the company’s transactions. Like, a break-in may destroy systems. For sure, it’s dangerous to do so for companies because the entire process can come to a stop.
5. You’ll Struggle A Lot With Supply and Demand, How?
Without a single doubt, being in a position where your customer is constantly using your product, and the vendor to your company, is like you’re trying to do everything all at once, which is not the right way to move forward. Without a single doubt, it is difficult to predict what will happen next due to unpredictable factors involved in predicting customer needs like the weather, which is so unpredictable in the first place. That’s why if you overproduce, you lose money on that storage space.
Conclusion
As you clearly saw like why we need supply chain management in place or else everything will fall apart in the business world, but sure enough, there are a few negative sides to SCM as well. Overcome those, and you’ll literally be an expert in all this.
