Lower costs with supply chain networks

The world over, organisations are aligning their production and distribution processes, the equipment and technology used in these processes, and the manpower and other resources required to increase the quality of their customer service and delivery. All of these constitute the supply chain network for them.

As trade brings countries closer, companies are coming up with innovative methods in supply chain management to boost productivity and quality, while also reducing overall costs. They are designing their supply chain networks in a way that offer static on-site integrated planning (that spans the entire process from end to end) with dynamic and real-time planning that absorbs current changes in work environment without impacting end results.

Designing a good supply chain

Companies are constantly realigning and reconfiguring their supply chain networks to factor in market changes, business complexities, new methods of supply and distribution, amended tax laws, and so on. Hence, supply chain management has become an area of intricate and precise planning, with enough scope to quickly absorb changes in the work environment. As opposed to previous models, current supply chain management techniques factor in dynamic strategic and operational decisions that best suit the company.

It logically follows that entire teams that examine and operationalise supply chains at various points and locations have now been created by many companies. Ideally, these teams are decentralised, and sufficiently clued in to the supply chain management design to balance and tweak ongoing processes with unique solutions.

External factors and their impact on supply chains

Any single change in the business environment has the potential to throw the entire supply chain management design off kilter. Even something like proposed tax reforms (such as the upcoming GST) will call for a new strategy. Decisions made thereafter will impact how the company conducts a particular part of its operations, and will also impact the costs associated with them.

Any change in the supply chain will have a rippling effect on internal processes as well. Optimisation must be achieved on every process in the supply chain before it becomes a functional whole. This is achieved through systemic redesign, an analysis of new policy decisions, redefining labour work processes, and so on. That is not to say, however, that supply chain management is only a reactive function – it also takes into account future progressions in operations.