Supply Chain Management (SCM) has become an important part of many businesses. But what is it? And why is it so important?
Supply Chain Management is the process of planning, organising, and managing the flow of goods from supplier to customer. Supply chains can be made up of one or many businesses, each performing their part to get the product or service to the customer.
Having a robust and reliable supply chain is important to the everyday running of your business – and also means you can adapt quickly if anything goes wrong. By making sure your supply chain runs smoothly, you can improve efficiency, reduce costs, and increase profits for your business.
Here are six key reasons to get your supply chain in order.
With SCM in place, you can monitor your entire production or supply process from order to shipment. This means you have a steady supply of the resources you need to meet customer demand and complete orders on time. Keeping a cashflow forecast and utilising finance options like invoice discounting means you’ll always have the liquidity you need to complete that next order.
Inventory is one of the biggest expenses for many businesses, but SCM can help to reduce those costs significantly. When you take control of your inventory levels and have a clear picture of your chain of supply, you’ll know exactly how much inventory you need to have on hand at any given time. This way, you’ll avoid unused extra inventory gathering dust and costing you money on storage fees.
SCM means you can streamline your operations from start to finish. You can combine cash-flow, inventory, and transportation management all at once to save time. By planning out buying cycles, production timeframes and shipments in advance, you'll save time and money on both ends.
Your team are experts at completing their own specific jobs, so it's important to make sure they have everything they need to do them well. Do Procurement have enough cash? Do Manufacturing have enough materials or parts? Do Logistics have enough vehicles or fuel?
Employees who feel overwhelmed or overworked are not as productive as employees who are confident that their needs are being met. With a proper SCM and cash-flow system in place, your team will never be waiting for the tools or materials they need to do their jobs.
SCM empowers businesses to know exactly how much of each product they have available at any one time. If a customer needs a certain product and you’re successfully using SCM, you can let them know if you’ve got their item in stock. If they know they can get it today, they’ll be more likely to choose you – rather than gamble on a competitor. This is an excellent way to ensure customer satisfaction and attract new customers.
As your business grows, your supply chain needs to grow as well. If you’re looking to expand into new areas of operations, you’ll need to have more products available from more suppliers, so that you can service more customers.
Bringing on more suppliers can lessen the single point of failure from your chain, which is only as strong as its weakest link. Having your systems and supply chain perfected on the small scale makes incorporating new suppliers, clients and sectors into your business that little bit easier.
At Optimum Finance, we utilise innovative technology to offer a range of flexible funding solutions, which grow alongside your business. Get an instant quote for the amount of funding you could access by entering your annual turnover into our finance calculator. Products include invoice discounting and factoring that can boost your cashflow and give you access to a dedicated credit control team.
Email or call us to speak to our experienced team of experts and find out how invoice finance could help your business. We pride ourselves on getting things done quickly and providing access to cash within 24 hours of approval. We are passionate about finding solutions and delivering to clients’ needs.