Providing customers with the highest quality products and services without effective supply chain management cannot be possible. Supply chain and logistics are two different departments that are vital in achieving the goals of progressive-oriented organizations. Logistics management controls resource flow from the first stage until the last to complete the process. An essential task of logistics is to reduce the time of production and wastage of resources. The logistics department has to work on these aspects to minimize wastage and time:
- Raw material channeling
- Management of material
- Resource distribution
Raw material channeling is transferring of raw material from the warehouses to a manufacturing facility. Management of the material implies handling material on the site of production and its flow, while resource distribution means managing the distribution of raw material and human resources.
The study mentioned above shows that logistics is integral to supply chain management. Logistics handles all the internal handling of products and raw materials, which is an integral part of supply chain management.
Procurement
Procurement is the process whose importance cannot be compared with any other department. Procurement of raw materials is based on their exceptional supply chain network, which only buys components from relevant suppliers. Procuring components and services from them gives the organization the assurance that what they buy is of the highest quality. Procurement from them is controlled by a highly effective supply chain management process, creating more profit for the organization and its vendors.
Improving Logistics and Procurement Practices
Supply Chain Management, Logistics, and procurement of products can be explained simply as follows:
Without an effective department of logistics and procurement order processing system will not be effective. Logistics should be managed in such a way that transportation costs must be decreased. Right now, many organizations are working with too many companies and suppliers. It would be prudent to reduce their suppliers to have a smooth procurement system.
Improving Supply Chain Management
There is always room for betterment in every occupation. The following steps can be taken to enhance the supply chain management modus operandi further:
- Cost reduction shall be given more time
- The transportation process should be made faster to reduce product development time.
- Some buyers from which the organization buys components shall be reduced
- The quality of products shall be increased by making R&D work on the quality of existing work
Effect on Business Performance
There are some factors that can improve the performance of the business through the enhancement of supply chain management. Some of those performance improving factors are:
- Cost Reduction
- Customer Services
- Efficient production facility
- Reduced Production Time
- Quality of products
Effects of Supply Chain Improvement Strategy
By implementing the improved strategies, which are presented above, many barriers can be reduced to make a leading organization even stronger in the market. The first thing is that reducing costs will remove the barrier of downsizing in the company. If a company is not going towards downsizing, every employee would be motivated to work; hence efficiency will automatically increase. Reduced transportation time will result in a decrease in production time; it will help in lowering the production cost as well. This transportation time can be reduced by limiting the suppliers from which they buy their components and commodities.
With having one of the most innovative and strong processes of supply chain management, they are in a good state. They are based totally upon their relationship with their customers, suppliers, and people working. With products of wide range, it shall be commended that they have developed an impressive supply chain system to ensure their place in the market.
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