The supply chain is an elaborate network which manufacturing companies of all sizes maintain with their trading partners in the market. Owners of these businesses maintain such a system to ensure they get the necessary raw materials they need without any hassle. The goods then go through a quality check in the owners’ factories before being made into finished products. The finished products are then sent to various warehouses that these owners maintain. The products are kept in such storehouses until the time comes for a transporter to take them to the retailers. The retailers then sell the final products to the consumers for a specific price. The process of streamlining the entire supply chain system which manufacturers maintain is known as integrated supply chain management.
What are the advantages of maintaining an integrated supply chain management system for companies?
Industry experts say manufacturing companies need to maintain an elaborate integrated supply chain management system for their businesses. Only then can the owners of these corporate enterprises meet the ever-increasing demands of their customers. Moreover, they will also be in a better position to exploit opportunities resulting from changes taking place in the market. In some cases, an integrated supply chain management system can enable manufacturing companies to foresee what their competitors are doing. These businesses can then take suitable measures to protect their market share and customers.
Industry specialists further point out the following three advantages of an integrated supply chain management system for manufacturing companies:
Having an integrated supply chain management system enables manufacturing companies to remain flexible. These businesses can adapt easily to the changes in the market, their customers’ demands, and the actions of their competitors. Owners of these corporate enterprises often get the information they need to modify their strategies from their trading partners. This gives them a competitive edge over other businesses in the market.
- Controlling costs
Manufacturing companies with an elaborate integrated supply chain management system often enter into price agreements with their trading partners. This allows the owners of such corporate enterprises to procure raw materials from their suppliers at the most competitive prices. They can even ensure the goods reach their factories on time without any difficulty. In the process, the owners are in a position to keep their operating costs within manageable limits.
- Eliminating waste
Eliminating avoidable waste in their production process is a major concern for almost all manufacturing companies. Emission, which arises from the conversion of raw materials into finished products, increases the cost of production of these businesses. Moreover, the release of such toxic gasses into the atmosphere is also a serious environmental hazard. Having an integrated supply chain management system allows companies to adopt suitable manufacturing practices that eliminate such waste.
An integrated supply chain management system can help manufacturing companies improve their productivity and relations with their trading partners. Owners of businesses maintain such an elaborate system can easily adapt their strategies to exploit opportunities arising from changes in the market. They can even take steps to eradicate avoidable waste from their production process and obtain raw materials at competitive prices. This helps the owners to keep the overall costs of their businesses within manageable levels, optimizing their resources in the process.