7 Core Benefits of End-to-End Supply Chain Management

Nancy
4 min readJul 13, 2022
7 Core Benefits of End-to-End Supply Chain Management

The complexity of today’s global supply networks necessitates a data-driven strategy for the supply chain management. An SCM system that is data-driven gives end-to-end visibility for monitoring the flow of information, services, and commodities from procurement to manufacture and delivery.

Good vendor and supplier relationships, efficient cost control, obtaining the proper logistics partners, and the use of new supply chain technology are all important drivers of successful supply chain management.

SCM isn’t an easy task, but it has various advantages that may help your company’s bottom line. Effective supply chain management has many major advantages, which we’ll go over in the following paragraphs.

1. Enhanced collaboration

The flow of information is a major problem for businesses. Sixty-six percent of organizations, according to Oracle, lack an automated information flow throughout the supply chain, and fifty percent of companies claim fragmented information leads to missed sales opportunities.

Software solutions that are integrated minimize bottlenecks and enable the smooth interchange of information, offering a big-picture perspective of the supply chain from beginning to finish. Supply chain managers have the knowledge they need to make better choices thanks to better access to data.

2. A better quality control system

Paul Page, a Supply Chain Global Expert, says that quality control concerns follow the rule of ten. Repairing or replacing an item costs 10 times more than the initial purchase price, thus when quality problems develop, businesses are hit hard by the rule of 10.

3. Higher efficiency rate

Companies may minimize future delays by implementing backup plans, such as acquiring supplies from a backup source, when they have real-time data on raw material availability and production delays. Due to the lack of real-time data, organizations are frequently unable to implement an alternate strategy and may encounter problems such as low inventory levels and delayed deliveries to customers.

In addition to boosting productivity, the use of smart automation solutions increases efficiency. For example, 6 River Systems’ collaborative mobile robots increased productivity by 75 percent and reduced needless walking at Healing Hands Scrubs. Your company’s reputation may be improved by investing in the correct automation solutions and using data to reduce delays.

4. Keeping up with demand

As a result of the rise and the belief that demand is likely to continue, retailers may purchase 7 percent more stock in response to the increase in sales,” says research from VISA. After seeing a 7 percent rise in demand, the next link in the chain asks a greater increase from his supplier. In the long run, the manufacturer might see a 20% boost in orders.”

When supply and demand changes are not communicated in a timely manner, the bullwhip effect occurs. The bullwhip effect may be avoided if supply chain executives have access to real-time, accurate information and integrated data that can forecast demand and react quickly to market circumstances.

5. Shipping optimization

From 2016 to 2017, freight transportation expenses rose by 7% while private and specialized trucking prices rose by 9.5 percent, according to the Logistics Management’s The State of Logistics Report. Costs for less-than-truckload and full truckload shipments both increased by 6.6%. Supply chain managers are focusing on shipment efficiency as a result of increased expenses.

For little shipments, massive bulk purchases, and various delivery circumstances, organizations may identify the most effective shipping options. These savings benefit the company’s bottom line, but they may also be passed on to customers, resulting in higher levels of satisfaction for all parties involved.

6. Reduced overhead costs

Because of better demand forecasts and more accurate stocking decisions, organizations may save money on storage expenses by holding less low-velocity inventory and more high-velocity, revenue-generating stock. There is a big impact on expenses from warehouse fulfillment charges. Optimizing your warehouse structure, deploying the correct automation solutions to increase efficiency, and creating a better inventory management system can help you save money.

Another strategy to save costs is to identify and eliminate wasteful expenditures. For example, if your shipping expenses are too high, moving to a lower-cost service provider might be a rapid gain.

7. Improved risk mitigation

Identifying possible risks in the supply chain by analyzing big-picture and detailed data may help firms prepare for unforeseen events. Companies may prevent negative consequences by taking early action rather than responding to supply chain interruptions, quality control difficulties or other challenges as they happen. Reduced operational costs may also be achieved by better understanding of hazards. Many organizations estimate they could cut their inventory by 22% with a better knowledge of supply chain risk.

As with any domino effect, supply chain interruptions affect every link in the supply chain. However, effective supply chain management has a direct and secondary influence on supporting the efficient, continuous movement of information, commodities, and services from procurement through final delivery.

Closing note

Technology is moving at an exponential rate. To succeed as a business, a digital end-to-end supply chain solution is the need of the moment.

--

--