A network between a business and its suppliers used to produce and distribute a specific commodity is called a supply chain. Supply chain management is the overseeing of that entire production and distribution flow to maximize quality, customer experience, and profitability.
It sounds simple but managing a supply chain can have its challenges. Here’s why: potential risks. Every supply chain comes with a diverse set of potential risks that can hurt your workers and your wallets.
Why is supply chain management important?
Supply chain management’s ultimate goal is to take a complex scope of business activities and transform them into strategic capabilities, aligned processes, and stronger relationships—improving an organization’s performance and competitiveness.
One of the ways to do this is by reducing incidents and worker liabilities. From entertainment to construction to the airline industry, safety hazards are everywhere—but they can be prevented and prepared for if they do occur. Worksites are safer when workers have greater visibility into safety practices, and when companies have only the most qualified and trained workers on site.
By managing the supply chain, companies can cut excess costs and deliver products to the consumer faster. When production is seamless and error-free, the product is made and packaged at a much faster rate than if there were faulty/dangerous working conditions.
Having a supply chain management process in place also helps companies build relationships with a network of contractors and suppliers. When you have an effective management system in place, your process can help vet the appropriate people for the job who are highly qualified and understand the rules.
How does supply chain management work?
In supply chain management, a supply chain manager coordinates all six aspects of the supply chain such as:
Planning—Plan out all resources needed to meet customer demand and deliver a product or service. Your plan should include metrics that will indicate if the supply chain is efficient, effective, delivers value to customers, and meets company goals.
Sourcing—Choose reliable and fully vetted suppliers to provide the goods and services needed to create the product. Once you have suppliers in place, you can establish processes to monitor and manage relationships.
Manufacturing—Put in place the resources required to accept raw materials, manufacture the product, test for quality, package for shipping, and schedule for delivery.
Delivery & Logistics—Coordinate orders, schedule deliveries, invoice customers, and accept payments.
Returning—Design a network or process to easily take back defective, excess, or unwanted products.
Enabling—Set up processes to monitor information throughout the supply chain and assure compliance with all regulations. Processes are needed in all areas such as finance, HR, IT, facilities, portfolio management, product design, sales, and quality assurance.
An Example of Successful Supply Chain Management:
The telecommunications FastTrac wanted lower insurance costs and better service. Through the Avetta Marketplace and our specialized relationships with over 100k suppliers, FastTrac connected with USA Telecom Insurance Providers. The relationship and proven supply chain management strategies resulted in lower premiums and better solutions for FastTrac—saving the company $10k in insurance fees and streamlining their COI approval process.
Avetta’s platform provides solutions to all these challenges. In fact, clients have reported a decline in onsite incidents using Avetta—all at a low costs and easy access to supplier information and certifications.