There’s no denying that integrated Supply Chain Management (SCM) can help your company stand out from the competition. Leading supply chain technology providers not only have a track record of delivering supply chain results, but they also continue to innovate to add even more value in today’s fast-paced business climate. But there are many myths regarding the scope of Supply Chain Management. Don’t let any of these misconceptions prevent you from taking your supply chain to the next level.
1. SCM is complicated
While implementation may require some effort, the end goal is to streamline your operation while enhancing business results. The issue is not that SCM is overly complicated; instead, the changing global marketplace and omnichannel operations have increased the complexity of supply chains. As a result, your company’s existing mode of operation has become too convoluted.
SCM simplifies day-to-day operations by automating mundane actions and delivering insights that enable effective decision making and exception management. Additionally, it allows visibility throughout your supply chain, allowing you to optimise your connections with suppliers and customers.
2. SCM is for big players
You are already involved in SCM if you are dealing with a supply chain. Indeed, businesses of all sizes must seek opportunities to increase efficiency, reduce expenses, and increase profitability in order to remain viable in today’s more competitive market. The trick is to adapt your business procedures and systems to your operation’s size. When your company climate evolves, market demands intensify, and client expectations continue to rise, you will need to step up your game regardless of your size.
3. SCM does not differentiate
Although the company may not recognise it initially, SCM is a strategic differentiator. This involves study, an understanding of the return on investment, and the capacity to communicate the benefits of supply chain management into the monetary terms that matter to executives. Rather than telling executives how much money they would save on warehousing and shipping, demonstrate how those savings will affect the company’s COGS (cost of goods sold) and SG&A (selling, general, and administrative) expenses. SCM’s strategic differentiation is not a new phenomenon. It leads to increased profitability, decreased expenses, and improved customer satisfaction, which accounts for increased revenue.
4. SCM has no ROI
Return on investment is always a consideration. When dealing with an investment of this magnitude, the returns are rarely instantaneous.
However, after implementing efficient supply chain technology and business procedures, you’re likely to experience an increase in income and a decrease in expenses in the first year, as well as an improvement in customer service standards. You should continue to see a rise in ROI because most costs occur in the first year, but benefits often last into coming years.
5. SCM cannot produce accurate forecasts.
Forecasts are projections of future consumer demand based on historical consumption patterns and triggering events. However, what clients want today may not be what they want tomorrow. Naturally, shops must maintain inventory to meet client demands, and manufacturers must know what to make. Successful firms employ innovative supply chain technologies to investigate all aspects affecting projections thoroughly, and they must have demand-level visibility to understand what is happening at the consumption point. Collaboration is enabled by having a complete end-to-end perspective of the supply chain, enabling manufacturers and retailers to make demand forecasting decisions based on real-time, shared data. While forecasting might be a challenging process, it is necessary for meeting client needs effectively.
