What is supply chain management?

Supply chain management is traditionally known as the management of the flow of goods and services. It has long been considered crucial to the success of any business. Its significance in the manufacturing sector cannot be overstated. Encompassing everything from sourcing and procurement to logistics and inventory management.

Effective supply chain management can help manufacturers reduce costs, improve efficiency and bring products to market faster. Thus, giving them a competitive advantage in the industry.  These factors help to improve a manufacturer's ability to meet customer demand.

Deloitte recently found that 79% of organisations with superior supply chain capabilities achieved revenue growth that was significantly above average. Only 8% of lower-performing supply chains out of the 400 manufacturers surveyed achieved comparable growth.

EU Automation works closely with a network of specialist couriers. That allows us to process and ship orders the same day they are placed. This same network means that deliveries are unaffected by unscheduled delays that disrupt other delivery methods.

Why is supply chain management important?

1. Effective supply chain management is critical for manufacturers. It allows them to optimise the use of resources, reduce costs, and improve efficiency. By streamlining the supply chain, manufacturers can reduce the time it takes to bring a product to market.

 In turn, this may give them a competitive advantage. By effectively managing the supply chain, manufacturers can improve the quality of their products. As well as, reduce the risk of delays or disruptions in the production process.

1. Supply chain management is also crucial for maintaining strong relationships with suppliers and supply chain partners. Manufacturers can secure a consistent supply of high-quality materials and parts at a competitive price. Carefully choosing suppliers and building strong relationships with them is the way to accomplish this. This is particularly important in manufacturing, where the availability of raw materials can impact production schedules and overall product success.
   
2. In addition, supply chain management is essential for managing inventory levels. This involves keeping track of the amount of raw materials, finished products and work-in-progress on hand. All while making sure that there is enough inventory to meet customer demand without overstocking.

This is particularly important in raw materials manufacturing. Manufacturers can minimise expenses by limiting the amount of money tied up in inventory. As well as, reducing the risk of stockouts by effectively managing inventory.

1. Finally, effective supply chain management is important for logistics and transportation. This involves moving raw materials and finished products from one location to another. Taking the necessary precautions to ensure that they are delivered on time and in good condition.

By effectively managing logistics and transportation, manufacturers can minimise delays and reducing the risk of damage to products. This will therefore reduce costs and improve efficiency.

Learn more about supply chain management on our Knowledge Hub.

What is a supply chain manager?

A product's supply chain manager is responsible for ensuring that everything functions smoothly from beginning to end. From raw materials to final packaging.

This covers the entire process, from sourcing raw materials to delivering the completed product to customers. Including, activities such as sourcing and procurement. Alongside, production planning and control, logistics and transportation, and inventory management.

The role of a supply chain manager is critical to the success of any business. This is because it allows them to improve the use of resources, reduce costs, and improve efficiency. They are responsible for ensuring that supply chain activities are running smoothly. While ensuring that there are no bottlenecks or delays that could impact the production process.

They are also in charge of overseeing supplier connections and securing a cost-effective supply of high-quality materials.

A supply chain manager's primary duty is to seek out ways in which supply chain operations can be enhanced. They also need to develop and implement strategies to address those issues. This may involve working closely with other departments to ensure that everyone is working together towards the same goals.

A supply chain manager also plays an important role in risk management. They need to identify potential risks and develop strategies to mitigate them. If there's a risk of a supplier not delivering the materials on time, an efficient manager will need a plan to secure the materials elsewhere.

Supply chain managers are responsible for ensuring compliance with laws and regulations related to the supply chain. For instance, it is their responsibility to guarantee that all environmental, safety, and labour rules are being adhered to. They play a crucial part in making sure the business can get its items to market quickly, affordably, and legally. This helps the company gain a competitive advantage.

A strong supply chain is only as good as the facilities at either end. If they’re not functioning properly then the whole process ceases to function properly. A supply chain manager will also be tasked with finding replacement parts when unexpected downtime occurs.

To efficiently tackle downtime issues, a supply chain manager will need a supplier. The supplier should be able to source and deliver parts quickly and cost-effectively. At EU Automation, we stock thousands of automation parts. We have a multilingual team that scours the globe to find what you need to get your business working again.

Outsourcing supply chain management

Manufacturers can rationalise outsourcing supply chain management for a variety of reasons. One of the main benefits is cost savings. By outsourcing supply chain management, manufacturers can reduce the need to invest in expensive equipment, technology, and personnel. Additionally, outsourcing allows manufacturers to focus on their business and leave other complex responsibilities to the experts.

Another benefit of outsourcing supply chain management is access to specialised expertise. Outsourcing companies often have a team of experts with knowledge in different areas of efficient supply chain management.

Outsourcing supply chain management can also help manufacturers to improve the flexibility of their operations. By outsourcing, manufacturers can quickly respond to changes in demand, market fluctuations, or other disruptions. This can help them to better manage risks and maintain a competitive edge in the market.

However, outsourcing supply chain management also comes with some potential drawbacks. One of the main risks is the loss of control over the supply chain.

Outsourcing also requires a high level of communication and collaboration between the manufacturer and the outsourcing company. This is essential to guarantee that targets will be hit. If the outsourcing firm encounters difficulties or goes bankrupt, there is also the possibility of supply chain disruptions.

Smart supply chain management

Smart supply chain management in manufacturing refers to the use of technology and data-driven strategies. It aims to optimise the production and delivery of products. By leveraging technology, manufacturers can gain greater visibility into their supply chain, automated processes.

Ultimately, this will lead to better supply chain execution. It will help manufacturers make better decisions to improve efficiency, reduce costs, and meet customer demand. As part of their digital business strategy, most companies (83%) want their supply chains to enhance the customer experience. This is in accordance to a recent study by Gartner.

In manufacturing, the Internet of Things (IoT) is one of the primary technologies propelling smart supply chain management. IoT devices and sensors can be embedded in products, machines and logistics systems. This allows them to provide real-time data on the location, condition, and performance of assets. This data can be used to optimise production schedules, reduce downtime and improve logistics efficiency.

Another important technology in smart supply chain management in manufacturing is advanced analytics. Data from Internet of Things (IoT) devices and other sources can help firms better understand their supply chain. It also allows them to locate opportunities for optimisation. Organisations can also use advanced analytics to predict demand, identify potential risks, and make better informed decisions.

What are the benefits of effective supply chain management?

Improved visibility into the supply chain is one of the key benefits of smart supply chain management in manufacturing.

A company's supply chain can be better understood by utilising advanced technology. They can use this to track assets in real time and collect data on their location, condition, and performance. This makes identifying areas of improvement much easier.

This can lead to reduced costs and improved efficiency. As well as, increased customer service satisfaction and better finished products.

Final Thoughts

Effective supply chain management is essential for any manufacturing company. Especially those, looking to optimise the use of resources, reduce costs and improve efficiency. Smart supply chain management, which leverages technology and data-driven strategies, can help manufacturers to achieve these goals. By gaining greater visibility into their supply chain, automating processes and making better decisions, manufacturers can reduce costs, improve efficiency and increase customer satisfaction.

We understand the urgency and importance of reliable lead times when a downtime situation strikes. EU Automation has facilities located on all major continents and has built a reinforced supply chain spanning the globe. Discover the ways in which EU Automation can enhance your supply chain management.