A supply chain is a network of suppliers that companies maintain to conduct their commercial operations. Each of these suppliers procures the raw materials the corporate enterprises need to make their brand products for them. These suppliers are links in an elaborate chain which increases the companies’ production costs and lead time. Supply chain management refers to the strategies the companies adopt to improve their supply chains’ internal efficiency. This results in a significant reduction in costs and an increase in revenues.
What are integrated supply chain solutions?
The supply chain management strategies the companies formulate and implement generally consist of the following components:
- Planning element- which is essential for controlling inventory and managing manufacturing processes,
- Sourcing element- which refers to identifying vendors capable of supplying the necessary materials most economically,
- Make element-are the activities the companies perform to convert the material to the products their customers demand,
- Deliver element-refers to transporting the final products to customers’ doorsteps via road, sea, or air, and
- Return element- is the post-delivery procedure the companies conduct when customers return defective products.
Integrated supply chain solutions are software systems that companies install and operate in their IT infrastructure. These digital platforms use the corporate enterprises’ existing enterprise resource planning (ERP) software solutions to streamline their supply chains. These companies generally maintain business relations with numerous suppliers providing them with essential raw material and components. They manage these vendors’ distribution channels and logistic activities using the integrated supply chain platforms. This approach helps overcome the following challenges of maintaining numerous independent systems in their businesses:
- Relying on manual data recording that results in significant clerical errors and longer lead times,
- Coordinating the activities of numerous suppliers spread over a large geographical area,
- Complying with regulation guidelines which various service-level agreements with suppliers specify,
- Monitoring the products customers buy across multiple sales channels within the supply chain,
- Keeping operating expenses under control during rising fuel, raw material, and labor costs,
- Dealing with order cancellations, backlogs, delays in the payment refunds due to inaccurate data,
- Ensuring the final products online customers buy reach them on time.
The advantages of operating user-friendly integrated supply chain management solution systems for companies are as follows:
- A better understanding of customers’ purchasing patterns and ways to provide them with better service,
- Minimize material wastage, shorten supply cycle times and redundancies in suppliers’ operations,
- Ability to adapt easily to ever-changing customer demands and volatile market conditions,
- Increase in internal efficiency, return of investments, and profit margins by streamlining workflow, and
- Sort out problems arising from supply chain operations instantly due to better information sharing.
Integrated supply chain solutions allow companies to boost the overall internal efficiency of their supply chain. This results in higher profit margins, return on investments, and greater market domination for the corporate enterprises. However, the software platforms the companies choose should be compatible with their existing databases and business solutions. Moreover, these software platforms’ metrics should enable the companies to an accurate picture of their activities. This helps the top management to make better decisions.