Supply chain management is one of the most important aspects of running a business because a failure to do so effectively can have devastating consequences. Supply chain management consists of managing the production of goods and services, as well as the movement of raw materials in a business. This includes oversight of all inventory and the development of processes to ensure ongoing availability of supplies.
Vendor relationship management is a key component of supply chain management because it can significantly impact the cost of equipment and goods. Whether you are working with a vendor that can sell circuit breaker supplies or a vendor that offers wide-ranging industrial equipment, it’s important to cultivate a relationship so that you can more effectively negotiate pricing and minimize expenses.
In a manufacturing company, a supply chain manager’s role is to oversee all aspects of the company’s supplies, including product development functions. They have an opportunity to reduce expenses by driving process efficiency. This often starts with the development of a strategic plan that incorporates processes organization-wide. The supply chain manager will often participate in activities for the full product lifecyle, from production to shipping. This is why their ability to drive efficiency is critical. They have an opportunity to identify process issues that can be costly. Working in coordination with key personnel, such as team leads and facility managers, is an important part of the supply chain management process in some organizations
Another key aspect of supply chain management is reducing risks. This is important for a variety of reasons. For starters, risk in any organization can be wide-ranging, especially when it comes to the safety of personnel during product development and manufacturing processes. There are also financial risks related to procurement and regulatory compliance. The potential costs associated with these risks are significant and must be actively addressed. A supply chain manager must make important decisions on a daily basis to ensure safety is optimized and regulations are satisfied.
Many companies conduct a SWOT (strengths, weaknesses, opportunities and threats) analysis and use it as an ongoing working document to manage the daily demands of a business. This allows them to understand current needs and make any necessary adjustments. It’s a more strategic way of managing all aspects of a business, but it is especially beneficial when used in supply chain management. A SWOT analysis can help you make more strategic decisions for individual team members, as well as the entire team, that will impact daily operations. This can also optimize the supply chain by maintaining updated knowledge of any weaknesses and threats. A SWOT analysis is a continuous and evolving process that’s of great value.
The complexity of some positions held by supply chain managers exist because they are required to oversee outgoing and incoming supplies, which often includes responsibility for all production operations. This requires diligence and stellar time management to do so effectively. From an operational perspective, decisions must be made quickly and with full knowledge of production timelines.