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Supply Chain Management: Definition and 5 Principles You Should Know

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Supply Chain Management: Definition and 5 Principles You Should Know

Posted by: Natasha BomStart
Category: Business
supply chain management

For those who are in charge of a company or are just starting to learn about a business, it is important to know what supply chain management is due to its importance.

This is a key aspect of a successful business as it can help your company grow and do the opposite if you are not that aware of this particular type of management.

In this article, we will explain to you about supply chain management as well as 5 principles that you should know about as someone who is in the business sector.

Keep reading to find out more.

Supply Chain Definition

supply chain management

For those who are unfamiliar with this term, a supply chain is a network between a company and their suppliers that helps to distribute their products to customers.

This chain involves a lot of people and activities. This is to ensure that the procedure of the production is smooth. It also saves costs and allows for a faster production cycle. 

This network between company and supplier is very crucial in all organizations because it ensures that the product will be delivered to the customer in the best form.

If you are in this sector, it is vital that you take note of this and make sure that your company also has a well-managed supply chain system.

How To Manage Supply Chain 

supply chain management

Managing a supply chain is a very detailed and complicated aspect of management. This is because it involves a lot of entities that must rely on each other.

Due to this, every member of the company must work hard to ensure that this network is managed efficiently.

Communication between channels within the network must be clear and concise. This technique is vital in order to ensure that the management can be run smoothly. 

Also, it is a great measurement that the products can be delivered on time and in good condition. 

The Importance of Supply Chain Management 

importance of supply management

As mentioned earlier, this network is crucial to a company as it helps the company to grow. Also, it can increase their revenues in an effective manner. 

But, how does networking correlate to the company’s growth? 

Networking is a very important part of business and a supply chain that involves many different channels and suppliers help increase a company’s network.

This may result in a company being able to cut costs in particular aspects due to its rapport while still maintaining great quality in its services and products.

5 Principles in Supply Chain Management 

There are five principles of a supply chain that you should know of as someone who works in a company.

  1. Sourcing

One of the biggest and most important parts of a supply chain is being able to source the best products and suppliers for your services.

Sourcing will require you to search for suppliers from all over the place. 

This step is done to ensure that you get the best deal for your company as not all suppliers offer the same prices for the products.

Having good sourcing skills is very crucial for a well- managed supply chain.

  1. Making

You will have to actually make the product. This has to be done well as it will represent your company. 

By doing so, it can enhance the company’s image depending on the quality of your product.

This is why sourcing is an important aspect as it will help facilitate the making component of the supply chain. Companies tend to do a lot of quality testing to ensure that their products are well made.

  1. Delivering
supply management delivering

Delivering your products to your customers is a very important step in supply chain management. This is because product delivery requires logistics and other entities of your network.

You will have to have good coordination and communication between other channels of the supply chain so that the procedure runs smoothly during delivery.

If communication breaks down, the product may not be able to be delivered to the customer which will then have a negative impression on your company.

  1. Returning

A return policy must also be thought of as it is an aspect that customers look for whenever they are looking to buy something for themselves.

This is because if the product is not of the quality they expect, they can simply return it for an exchange or voucher. This will involve you claiming the product back in your warehouse.

As such, your company must be well-prepared in product management especially whenever a customer wants to return the products.

  1. Planning

The last principle of managing a supply chain may well be the most important which is planning. This is crucial to ensure that your company is well prepared for anything that may happen.

Having good plan management is a great way to make sure that every channel in your network runs smoothly and is efficient in their roles.

This will allow for a better flow and will make things so much easier if the planning is good.

In conclusion, having good supply chain management is a very important aspect of a company’s operation due to the benefits that it brings.

If you are looking for a company in Malaysia to help with the distribution of your products and services, you should check out KAT!

KAT uses KATSys™ which is a comprehensive distribution management system loaded with tracking, handling, reporting, and data mining features.

This will ensure that no problems will occur when they handle your goods with extra precautions!

They are committed to perform at their best so that you, their  customer, will be able to perform better than your previous best.

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Author: Natasha BomStart

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