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Advantages Of Supply Chain Management For Small Businesses

by anonymous

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Supply chain can be actually defined as the movement of materials from their origin to the end customer. It includes the following steps:

  • Buying of raw materials

  • Manufacturing the products

  • Stocking the end product

  • Transporting the end product to retail merchants

All the above mentioned components need to work in tandem and for this proper planning and customer service is required.

So how does supply chain management benefit the small businesses?

In order to survive, small businesses face the challenge of offering superior quality goods at the lowest possible prices. The product costs need to be reduced and perhaps this is the reason why supply chain management is so essential for them. This system works very well for logistics management solutions, systems and software providing firms. Read on to know the advantages:

  1. The processes that are a sheer waste of money and do not add any value to the product must be eliminated whenever possible. An effective supply chain management process involves the identification of such methods so that any small business can earn huge profits.

  2. When small business firms apply an effective supply chain management system, they form a strong bond with the customers as well as suppliers. This is done by delivering all the orders well on time and increasing the trust factor. More and more customers will get attracted to a company that offers timely delivery of products.

  3. Lack of planning always causes wastage of resources. A good supply chain management comes to the rescue here as it encourages all the value adding activities. By employing this method, a company is able to function smoothly and also increases its efficiency. This in turn is responsible for huge profits.

  4. The main motive of starting a business is to earn huge amounts of profits. By keeping the costs very low, one can increase the profits to a great extent. When a small business successfully applies supply chain management, it reduces the wasteful processes thereby leading to decrease in the costs. Since the operating costs plummet downwards, the savings turn into huge profits.

  5. Making the correct and valued brand image is the dream of any small scale business. Therefore, supply chain management again becomes imperative here as it allows a business to improve its brand image. This is done by lowering the production costs combined with the production of very high quality products. The customers are delivered the goods on a timely basis and this is one of the most important aspects of supply chain management that fosters a company’s brand image and consequently helps it grow manifold.

In conclusion, it can be said that supply chain management is very beneficial for any kind of business; especially small-scale ones. It helps in the overall growth of the company by providing strong links between the buying, production and transportation department. If the links are strong, the overall functioning of the company improves and it scales new heights.

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