A supply chain management service starts with ordering raw materials from the supplier and ends with delivering the finished product to the customer. The processes involve sourcing, manufacturing, warehousing, shipping, and reverse logistics.
Each process is quite important for the smooth flow of products and increased customer satisfaction. Effective supply chain management even reduces warehouse and logistics costs and improves the decision-making process in a business.
So, Let’s explore the supply chain services in-depth and see how outsourcing supply chain management can be beneficial for businesses.
What Is Supply Chain Service?
Supply chain service involves the coordination of the entire production flow in a business. It involves everything from sourcing raw materials to the final delivery of the finished product to customers. It involves various activities such as procurement, warehousing and inventory management, transportation, and order fulfillment.
The supply chain is a complex network of suppliers, manufacturers, distributors, retailers, and customers. Effective Supply chain management involves coordination of all of them to have faster delivery of products to the customer and increase brand reputation in the market.
It even reduces cost, wastage, and time and allows a business to stay ahead in this competitive world.
Different Stages Of Supply Chain Management Services
1. Planning
Planning is the foundation of supply chain management service. It involves forecasting the customer demand for the product in the market and ensuring that the business is ready to meet these demands.
Businesses need to review previous sales data, understand market trends properly, and forecast product demand in the market. Incorrect planning can lead to overproduction or shortage of products.
Planning even involves predicting the amount of resources and allocating the budget to meet customer demand. Manually demand forecasting is challenging for any business. Hence, most businesses are utilizing advanced technology like AI, machine learning, or cloud-based forecasting tools to improve forecast accuracy and reduce stock-out issues.
2. Sourcing
Sourcing involves the selection of reliable suppliers who can deliver raw materials for manufacturing products.
You need first to determine the quality and quantity of raw materials that are required for production. Your next step should be to carefully select the suppliers who will provide good quality materials at an affordable cost. Careful selection of suppliers is quite necessary. Delays in delivering products or inconsistent raw material quality can decrease customer satisfaction and adversely affect the growth of the business.
To have effective supply chain management processes, a business should communicate properly and establish long-term relationships with reliable suppliers.
3. Manufacturing
It includes processes where the raw materials are converted into finished goods or products. It is one of the most important processes in the supply chain service. Any mistake in manufacturing processes can lead to faulty products and decrease customer satisfaction.
4. Delivery
Delivery includes all the processes involved in moving the manufactured product to the customer.
The finished goods are first stored in warehouses. Whenever a customer orders a product, the warehouse staff picks up the products or goods, does proper packaging, and labels them. They are transported to the retailer or end customer. A business can use transportation modes like road or rail depending on the distance traveled, fuel cost, product sensitivity, and many more.
The products from the retailer are then transported to the customer. Timely product delivery always builds trust and loyalty to the brand in customer’s minds. Delays in ordered products can cause a bad reputation for the brand in the market.
5. Returns
Customers can return products because of defects, receiving the wrong product, or a sudden change of mind. Businesses need to manage returns or offer easy refunds in a way that will keep customers happy.
An efficient return process involves tracking the returned products, understanding the reason for customer return, and then doing quick refunds. This process will not only help to build customer trust in the brand but also help to improve the product or supply chain processes.
Benefits of supply chain management services
1. Quality Control
Efficient supply chain management services help improve the quality of the final product. It ensures smooth operations at every stage, from sourcing raw materials to final delivery. Proper handling, storage, and transportation reduce delays, minimize damage, and maintain product integrity.
2. Enhance Customer Satisfaction
Customer satisfaction is the primary objective of any Business. However, there can be delays in delivering the ordered product due to heavy traffic, labor strikes, or pandemics.
Research shows that 69% of online shoppers don’t like to shop from a brand again if they don’t receive their ordered product on time.
Another study says that only 21% of consumers were ready to forgive a brand for late product delivery due to the COVID-19 pandemic.
This explains the importance of timely order delivery, especially in an E-Commerce Business. Effective supply chain service can only lead to timely delivery of the ordered product to the customer.
3. Inventory Visibility
31% of businesses deliver products late because they do not realize that the product is out of stock in their warehouse at the right time. That’s why smooth supply chain services are important for a business. It offers live inventory visibility and reduces problems like out-of-stock and overstock problems as well.
4. Lowers Cost
Outsourcing the best supply chain services can reduce inefficiencies and waste, reducing a business’s overall cost expenditure.
Challenges in supply chain services
There are various challenges in supply chain services, which are listed below.
1. Material Scarcity
Shortages of various materials, like glass and plastics, can cause delays in the manufacturing process. This can reduce a business’s profits and adversely affect the entire supply chain operation.
2. Lack Of Supply Chain Visibility
Lack of supply chain visibility means the inability to monitor activities, materials, or information in the entire supply chain. It can disrupt various operations, delay product delivery, or hinder a business’s decision-making process.
An efficient supply chain management service can track suppliers, monitor the stored products in warehouses, and gather information about the entire supply chain. This can identify bottlenecks in the management process, and businesses can take quick actions to reduce delays or disruptions.
A business can increase inventory visibility by adopting advanced technology and automating warehouses.
3. Increase In Freight Price
The rise in fuel prices can increase freight prices, which can increase the cost of the business.
A business can meet this challenge by partnering with logistics companies or utilizing advanced technology like transport management systems.
These systems enable businesses to find the best possible route for good transportation based on distance, traffic, and many other factors, reducing their logistics costs.
Future Trends in Supply Chain Management Services
- Supply chain management services will undergo rapid changes because of advances in technology. More modern warehouses have been automated in recent years. Robots, drones, and autonomous vehicles will speed up warehouse operations. There will even be fewer errors and faster order fulfillment.
- Blockchain technology will be adopted to increase transparency and keep records of the supply chain processes.
- Businesses will use electric vehicles for goods transportation, reducing their carbon footprints. Again, more businesses will adopt eco-friendly packaging and solar-powered warehouses, benefiting the environment.
- Businesses will increase collaborations with suppliers through cloud-based platforms.
How does AAJ Supply Chain Management Help Businesses to Optimize Supply Chain?
AAJ Supply Management Company is equipped with advanced technology like a WMS and TMS, which optimizes the efficiency of the entire warehouse logistics operation. The company offers fast, reliable, and agile warehousing and ecommerce fulfillment services. The solar panels are installed in the warehouse to reduce carbon footprint in the atmosphere. It uses advanced tracking systems to give businesses real-time updates about shipments and inventories.
Conclusion
Supply chain management service is the backbone of any business. It ensures a seamless flow of goods and information from the suppliers to the end customer.
End-to-end supply chain services can improve the quality of the product and deliver the ordered product on time to the customer. However, many small and medium enterprises face a few challenges while managing the supply chain processes. For example, the fuel cost rises with time, and that can increase the operating cost of the businesses. Tracking inventories manually in the warehouses can even lead to errors. Supply chain companies should adopt advanced technology and utilize different software to meet these challenges.
AAJ Supply Chain Management
