It is a well-known fact that a well-organized supply chain is an important component that determines the success or failure of any business. A supply chain refers to the resources or the inputs that a business needs to deliver goods and services to its customers. A good and well-organized supply chain is important to any organization since it increases customer satisfaction and gives an organization a positive image. It also increases the speed that takes products to move from the production line to the market. As Göçer et al. observe, having a well-organized supply chain has many benefits to a company or business. Foremost, a good supply chain boosts customer service since goods and services are delivered to customers at a much quicker pace. An efficient supply chain reduces the cost of operation for many businesses, especially the cost of purchasing and production (2015). From the few advantages provided above, it is clear that every business should strive to have a well-organized supply chain to enjoy its many benefits. This paper is aimed to discuss at length the various benefits of a well-organized supply chain to business organizations.
The Impacts of Product Development and Consumer Relations on the Supply Chain
An analysis of different supply chains proves that they are easily affected by product development and consumer relationship. The relationship that exists between a company and the consumers of its products, as well as its suppliers, determines the efficiency of a supply chain. Through effective consumer relationship, a supply chain can be developed in such a way that it caters for the needs of different customers within a target market. Since consumer relationship management is concerned with the preferences and the needs of the consumers, integrating it into a company’s supply chain enables the supply chain to be even more effective. Product development also plays a crucial role in the efficiency of a company’s supply chain ( Göçer et al. , 2015) . As Göçer et al. observe, the design of a product may also increase or decrease the risks that face a supply chain (2015). Companies must always strive to study the needs and preferences of their customers to develop products that can move off the shelves at a faster rate. Matching the consumers’ needs with the supply reduces the risks facing the supply chain; thus the success of the organization. From the analysis is it is clear that both product development and consumer relationship play a huge role in determining whether or not a supply chain will be effective.
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The Impacts of Forecasting and Outsourcing on a Supply Chain
Even though forecasting is an imperfect science, it is still an important part of any business. Forecasting is crucial to the success of any business since it helps businesses to have enough supply on hand to satisfy any arising demand. Most businesses use supply chain management systems as well as other tools to study and forecast the demand for their products weeks and even months in advance. Forecasting is therefore important to businesses as it helps them to prepare themselves well enough to be able to meet the needs of their consumers ( Doering, & Suresh, 2016 ). Forecasting is also important since it plays a major role in the budgeting process of a business. Through forecasting, businesses can set aside enough funds that are needed by supply chains to meet the demands of the people. As time goes by, many businesses have realized that forecasting can give them a competitive advantage over their rivals, which explains the increased usage of forecasting tools and techniques.
Outsourcing is another important factor that affects supply chains and the operations of various businesses. Outsourcing involves the process of contracting out various business functions to other parties outside the business ( Wiengarten, Pagell, & Fynes, 2013 ). According to Wiengarten, Pagell, and Fynes (2013 ), several advantages come with outsourcing. Foremost, it enables a business to focus on its main activities thus leading to improved efficiency. The practice also helps the organization to control the costs of operation since most of its activities are delegated to third parties.
How Relationships with Customers and Suppliers Contribute to a Successful Inventory Management System
Coming up with a successful inventory management system has several advantages for businesses such as the prevention of stock outs, accurate record keeping and the management of various locations ( Rawat, 2015 ). It is therefore critical for business organizations to ensure that they have effective inventory management systems by creating strong relationships with the suppliers, the customers and the implementation of efficient logistics strategies. Rawat (2015) notes that creating strong relationships with the consumers and suppliers is important to an organization since it ensures a steady supply and distribution of products to the target market. When businesses maintain healthy relationships with their clients, they can identify the needs and the preferences of their customers hence ensuring the steady supply of goods to meet those needs. A healthy relationship with suppliers ensures that a company's goods are supplied continuously to the target market ensuring that customers can easily access them. Another important component in the creation of an efficient inventory management system is coming up with an effective logistics strategy which ensures the uninterrupted flow of goods from the manufacturing plant to the consumers. A good logistics strategy accounts for all the possible events that might affect the supply chain and provides solutions to such challenges ( Rawat, 2015 ).
The Benefits of the Push and Pull Inventory Control System
The push and pull inventory methods are the main used inventory control methods by many organizations. The push inventory control system involves forecasting the customers' needs and preparing inventory to meet the identified needs. To effectively match the demand of their customers, companies that apply the push control method try to predict the products that are likely to be purchased by their customers as well as their quantity ( Marquès et al., 2012 ). The push control strategy has various benefits to the organizations that use it. Foremost, it makes it possible for businesses to carry out long term planning. The application of the inventory control system ensures that there are readily available stock to meet any arising needs. Furthermore, the method provides room for more planning and control. Another inventory control method is the pull method which relies on the orders made by customers to determine the type and quantity of products needed. Companies using this method only produce enough products to meet the demands of their customers ( Marquès et al., 2012 ). One of the main advantages of the push system is that there will be no excessive stock thus reducing the costs of storage and transportation. Other advantages include high service levels and few markdowns. An important factor that must be considered by all business organizations is the creation of an inventory system that is closer to the end; such an inventory system plays a crucial role in product distribution as it helps in the sorting out of products headed for different markets.
How Collaboration Can Be Leveraged in a Company
It is crucial that companies emphasize the importance of collaboration to encourage the spirit of teamwork which is essential in solving various problems within companies. Companies must create open environments where people can communicate freely to share their knowledge and opinions regarding how to help the company achieve some of its main objectives. Investments must also be made into creating good communication channels which facilitate collaboration among various departments and individuals. Such steps are guaranteed to create product innovation and improvement over time ( Göçer et al., 2015 ).
Conclusion
In summation, various factors demonstrate the impacts of a well-organized supply chain to the performance of an organization. A supply chain includes the resources or the inputs that a business needs to deliver goods and services to its customers. A good and well-organized supply chain is important to any organization since it increases customer satisfaction and gives an organization a positive image. Through effective consumer relationship, a supply chain can be developed in such a way that it caters for the needs of different customers within a target market thus improving its sales. It is also important to note that forecasting is crucial to the success of any business since it helps businesses to have enough supply on hand to satisfy any arising demand. Most businesses use supply chain management systems as well as other tools to study and forecast the demand for their products weeks and even months in advance. Forecasting is therefore important to businesses as it helps them to prepare themselves well enough to be able to meet the needs of their consumers. From the analysis of the impacts of a well-organized supply chain, it is clear that companies need to ensure that their supply chain is also well organized so that they can enjoy the benefits that come with them.
References
Doering, T., & Suresh, N. C. (2016). Forecasting and performance: conceptualizing forecasting management competence as a higher-order construct. Journal of Supply Chain Management, 52 (4), 77-91
Göçer, A., Yumurtaci, I. Ö., Yurt, Ö., & Baltacioglu, T. (2015). A new framework for supply chain risk management through supply chain management capability. Çanakkale Onsekiz Mart Üniversitesi Yönetim Bilimleri Dergisi, 13 (26), 151-174.
Marquès, G., Lamothe, J., Thierry, C., & Gourc, D. (2012). A supply chain performance analysis of a pull inspired supply strategy faced to demand uncertainties. Journal of Intelligent Manufacturing, 23 (1), 91-108. doi:http://dx.doi.org/10.1007/s10845-009-0337-z
Rawat, K. (2015). Today's inventory management systems: A tool in achieving best practices in Indian business. Anusandhanika, 7 (1), 128-135.
Wiengarten, F., Pagell, M., & Fynes, B. (2013). The importance of contextual factors in the success of outsourcing contracts in the supply chain environment: The role of risk and complementary practices. Supply Chain Management, 18 (6), 630-643. doi:http://dx.doi.org/10.1108/SCM-03-2013-0071
