Imagine a scenario where you went to your local retail store or online store and discovered that the latest electronic gadget or the latest book that you were so eagerly waiting to purchase was “not in stock”! The immediate reaction will be to check other retail stores or simply move to other online portals. To avoid this and lose potential customers an effective supply chain strategy is needed. The main components of a ‘Supply chain management’, what it is, the necessity to have a SCM in place and SCM analytics will be the focus of this post.
What is Supply Chain management?
The major components of an effective SCM are suppliers, manufacturers, distributors, retailers and customers. The effective movement of the major components of SCM thereby maximizing profits for the organization, providing customer satisfaction and reducing inventory is the basic idea behind ‘Supply chain management solutions’. Wikipedia defines SCM as “Supply Chain Management (SCM) is the management of the flow of goods and services. It includes the movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption” (Supply Chain management)
Why Supply Chain management:
The two primary reasons for Supply chain management are stated as follows:
- As more and more businesses proliferate all across the globe, competition is fierce and every organization would like to stay ahead and reap huge profits. Local businesses are dealing with new foreign competition and they have to find innovative ways to stay ahead. One way increased profits can be achieved for organizations is by adopting an effective supply chain management solution.
- The ‘Information Age’ has bombarded us with plenty ways to communicate and most customers want products instantly by the click of a mouse (or a button on the phone). This change from a static age to ‘Information Age’ is fuelling the growth for new SCM solutions.
Top 5 Supply Chain list:
After having seen the meaning of ‘Supply chain management’ and the necessity for having SCMs, we will next see Gartner’s top 5 supply chain list:
- Apple
- Procter and Gamble
- com
- McDonalds
- Unilever
- Intel and
- Inditex
Both “Apple” and “Procter and Gamble” have been included in the “Master list” of Supply chain leaders. “Apple” has become the “apple of consumer’s eyes and spending habits”. The iPhone, iTunes and Apple Pay have only charmed the user further. This has enabled Apple to lead the supply chain from 2008 -2014.
Similarly, P&G “ embedded the concept of a consumer-driven supply chain” (The Gartner Supply Chain Top 25 for 2015, 2015) and made efficient use of the supply chain to stay ahead.
Amazon.com -the leader in constantly innovating things, McDonalds, Unilever, Intel and Spanish clothing retailer Inditex round off the top 5 supply chain leaders.
Analytics in SCM:
After having seen our supply chain leaders for 2015, let us see how analytics plays a role in SCM. Analytics seems to be the word that seems to be associated with most industries – we have ‘data analytics’, ‘twitter analytics’, ‘Google analytics’, ‘fraud analytics’, ‘credit risk analytics’ and so on. And to apply analytics to SCM is the most obvious thing to do – because predicting future growth is only possible by analyzing past data.
Supply chain intelligence allows you to study the raw data pertaining to existing business chains and allows you to better manage the inventory in real time. This in turn, enhances customer buying bringing in more profits. (Supply Chain Intelligence)
We have seen ‘Supply chain management’ in this post. This area is again poised for more growth as time goes by.
Bibliography
Supply Chain Intelligence. (n.d.). Retrieved from sas.com: http://www.sas.com/en_in/software/supply-chain.html
Supply Chain management. (n.d.). Retrieved from Wikipedia.org: https://en.wikipedia.org/wiki/Supply_chain_management
The Gartner Supply Chain Top 25 for 2015. (2015). Retrieved from Gartner.com: https://www.gartner.com/doc/3052620?srcId=1-3132930191#a-1860903150
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