See 6 advantages of Supply Chain Management for small businesses

6 minutes to read

Do you know what supply chain management is? This means that there is a whole work of logistics and management to provide an ecosystem of supply of products indispensable for the correct functioning of the company.

This directly affects the production process, improving several operational aspects. The small business owner can also benefit from using this strategy. With that in mind, we have prepared this material to demonstrate how supply chain management for small businesses can help your business grow.

So, do you want to discover all this and more? Check out the article reading it through!

What is the relationship between supply chain management and logistics?

First, it is important to note that these two sectors are closely related. This is because integrated logistics is the basis for the development of supply chain management. In the past, many entrepreneurs saw this as just an important supply chain for the company.

However, today, it is possible to see how a complex integrated network is involved in the creation of the final product. First, it must be understood that logistics and supply chain management are not the same process.

Logistics is in charge of transporting, storing and managing goods. On the other hand, the supply involves the entire chain, from the extraction of the raw material to the preparation of the final product. Thus, it is possible to see how the supply chain management for small companies is something bigger within a chain of logistics management.

How does supply chain management contribute to the growth of a company?

This doubt is very important. The correct application of management strategies allows a significant cost reduction, directly impacting the company’s financial results. Below, we list 6 competitive advantages of this model!

1. Cost reduction

As already mentioned, supply chain management enables the adoption of precise and professional conduct in the management of supplies and other associated factors. As a result, additional expenses and production surpluses significantly decrease in order to reduce costs.

2. Increase in profits

It is easy to understand that, with less costs, the greater the profits of the activity. This is exactly one of the biggest competitive advantages of adopting supply chain management for small businesses.

3. Better consumer experience

Promoting a good shopping journey favors customers and favors the organic growth of the company. Remember that customers are the key to a company growing and thriving in its niche.

4. Gain competitiveness

If the product has more quality, a satisfactory price for the consumer and excellence in delivery, the results will be gains in competitiveness.

5. Integration of operations

Supply chain management also provides integration of operations, an advantage that certainly stands out in the globalized world in which we live, in which there is so much information and business possibilities, because integration allows the improvement of all processes.

Technologies, such as barcode or the latest RFID, are examples of how it is possible to exchange information through integrated systems, making it easier to exchange between the people involved.

The use of ERPs also promotes better, more transparent communication between group members and even with members of other companies that are integrated into the process.

6. Agility

Nowadays, the speed of the processes is fundamental to improve billing and enable the acquisition of more customers. Knowing how to apply supply chain management in the company, it is possible to use some methods, such as Lean Manufacturing and Just In Time, which reduce the period in which the inventory remains stopped.

The faster this process takes place, the lower the inventory and transportation costs, as well as the expenses associated with distribution and other expenses.

How can we apply supply chain management in the company?

To apply supply chain management in the company, it is important to follow some steps.

Identify partners

It is necessary, at first, to identify who are the partners involved in the chain to analyze the work situation of each one of them. From this, it will be possible to decide if they are, in fact, the most recommended to integrate the process and if they satisfy the needs of the business.

The analysis of partnerships also makes it possible to identify whether it is necessary to increase this network in order to obtain closer ties between the participants.

Integrate the teams

All company teams, which are part of the different sectors, must be integrated. This is the case with sales, finance, production, marketing, operations planning and so on. This integration is necessary to make the exchange of information easier and more improved.

For this integration to be effective, it is important to have an IT system capable of adding efficiency and speed to the processes, reducing human errors and the number of unforeseen situations. This system allows a more comprehensive view of the process.

Define the objectives

The main objective of supply chain management is to ensure an integrated vision, with the sharing of information and updates of the entire supply chain, with joint cooperation to improve operations and results.

In this sense, it is important to win strategic alliances, being careful in the selection of partners and closely monitoring their performance.

Optimize the flow of information

In addition to mapping the companies involved, it is important to identify all the people who are part of the context, knowing who they are, where they are and how they interact with the supply chain. Then, the flow of information between all stakeholders will be possible.

The idea is for everyone involved in the chain to communicate and share their impressions and ideas and their conclusions, so that the whole company has a chance to improve its products / services.

Throughout the text, it was possible to understand a little more about how vital supply chain management can be for a company. Counting on the help of experienced professionals in the subject can be a winning strategy in the competitive national market. It is very interesting to analyze the hiring of a specialized consultancy to help in the process.

Have you thought about having a technical team with more than 15 years of experience in the market at your disposal? Get in touch now with our consultants to outline the best strategy for your business. Our team will be happy to answer your questions. Realize, in practice, how supply chain management for small businesses is vital.

ABOUT THE BLOG

The VMI Portal is a portal of news and information on systems of collaboration between suppliers and customers, which is growing continuously. The idea is to promote and disseminate the concepts of Supply Chain Management (SCM) and Vendor Managed Inventory (VMI), among other topics.

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