In todays' competitive market, efficient supply chain management (SCM) plays an important role for successful business. SCM helps ensure the seamless flow of products and services and actively streamlining the supply-side operations of business. SCM maximises the value to customers while securing a competitive business advantage. 

Businesses need to effectively manage inventories if they want to experience long-term growth. According to a DHL white paper, ineffective SCM strategy causes resource loss, high costs, and lower agility. What if retailers run out of stock during festival time, when sales demands go high relatively? It would turn into the worst nightmare for retailers. 

Whether retailers operate on a large or small scale, they must use SCM in order to control product quality, inventory levels, costs, and ensure deliveries on time. Therefore, using SCM helps your business reduce high expenses and deliver products quickly to your customers. 

Following are Some Strategies for Ensuring Efficient SCM

Focus on TCO

Small businesses basically focus on pricing to protect their business. However, a strategic approach helps businesses pay attention to the total cost of ownership (TCO) of products and services. The acquisition cost of most products and services is around 25-40% of the TCO only. So, businesses must focus on other elements such as warehousing, operating, transportation, etc. If businesses prefer prioritising overall value and long-term benefits, it will produce great results. 

Optimise Inventory Management

To smoothly operate SCM, businesses need to understand their total supply chain costs. Inventory helps businesses store, use and sell products, and it plays a crucial role in determining the overall cost. Businesses need to review inventory levels regularly so that their sales operations don't get impacted. To optimise inventories, businesses should work with their suppliers and emphasise demand planning and forecasting. 

Invest in Automation

Automating helps supply chain processes enhance its efficiency, reduce human error, and increase speed and SCM performance while saving time, money, and resources in the long term. There are various tasks that are time-consuming, such as order processing and shipping. By automating them, businesses can save lots of time and resources. Furthermore, it makes operations smoother and increases productivity. 

For instance, warehouse's automation helps you reduce the time, errors and efforts in logistics. As we know order picking constitutes 55% of a warehouse's operational expenses. So, improvement in order picking efficiency and limiting errors can boost profitability. 

Maintain Robust Supplier Relationships

Maintaining good relationships with suppliers are important to success. Doing so needs mutual understanding, two-way communication, performance assessment, common objectives, and the creation of a platform to settle conflict.

Minimise Risks Via Periodic Reviews

Businesses need to have regular review meetings with the SCM team in order to check whether the policies and procedures are compliant with local laws or not. Besides, it helps in smooth operations as well as mitigate the risk of fraud and theft. It is important to collaborate with suppliers to reduce the risk. But before collaborating, you must ensure that your supplier should be competent, reliable, and financially strong. Regular reviews of SCM processes help you find problems at an early stage that can be fixed immediately. 

Employ an Integrated Approach 

Like other businesses that cannot function in isolation, supply chains need to integrate with marketing, sales, finance, operations, and similar industries. One of the important aspects of SCM is planning. Marketing and sales departments can influence supply planning by providing the relevant data to accurately predict future demand. Similarly, various other departments depend on the supply chain function for smooth operation. 

Conclusion

Supply chain management is the key to success of businesses. As we know that in the highly competitive market, you will not survive unless you have effective supply chain management. Because, it is crucial to store, keep records of products and sell goods.  Supply chain management helps businesses maintain their products efficiency and ensure their delivery to respective customers. Handover, a leading supply chain management company in India, helps businesses operate smoothly.