Question

Discuss the importance of supply chain management. What impact does the supply chain has on the overall organization performance and competitiveness in the marketplace?

Answer 1

A company’s supply chain directly add to their value chain. What this means is that the value that the company proposes to its customer is directly correlated to their supply chain efficiency and the cost with which the company manages its operations.

Supply chain management is an umbrella term, including inventory, production, supplier management, logistics, and other processes, all possessing a significant amount of influence over the baseline value of the company. How the company operates is also correlated to their ability to engage their customers and boost customer service accordingly. Supply chain management, when performed optimally, allows the ability to decrease both purchasing and storing costs, production costs, improves cash flow and reduces the need to rely on fixed assets. All processes conducted under supply chain management increases the firm's ability to leverage better profits from their current operations. It has application in the field of not only business but healthcare as well. A firm can compete with others in their industry through the efficiency of its supply chain. Since the more optimized supply chain is more conducive to allow the company to sell products and services with similar quality at a considerably lower price, think Walmart.

Supply chain management also reduces the wastage the from creates, allowing them a more favorable public image and substantially increases their brand value as well.

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