The Hone-All Precision Limited Blog

5 Key Benefits Of Supply Chain Management

Posted by Andrea Rodney on Jun 7, 2021 1:24:19 PM

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Manufacturing products and shipping them to customers doesn’t just happen overnight by magic. Instead, the design and creation of products relies on a complex supply and resource management system that often extends beyond international borders, from the sourcing of raw materials to the eventual delivery of the completed product to the end user.

Get my copy of the FREE Guide To Deep Hole Drilling, Boring & Honing Costs!However, a supply chain isn’t simply about the physical product, but also features personnel, equipment, and logistics. If any part of a supply chain fails, the entire operation can be subjected to extensive and costly delays. Because of the complex nature of modern supply chains, effective management is essential to ensure complete end-to-end visibility. What are the benefits of good supply chain management (SCM)?

1) Better Collaboration

Problems in the transfer of information can cause delays and misunderstandings between supply partners. In a survey, one half of companies reported lost sales opportunities because of incomplete data sharing. Implementing automated SCM software can improve the flow of data between parties in the supply chain, ensuring businesses can make informed decisions and take advantage of sales opportunities.

2) Quality Control

Businesses that have control over their suppliers enjoy improved quality control, resulting in less wastage and better customer satisfaction. Laying down minimum quality standards, for example, encourages suppliers to partner with secondary suppliers who also meet expectations, ensuring conformity with your standards throughout the supply chain. Key performance indicators (KPIs) to monitor include on-time delivery, scrap rates and reworks, complaint resolution time, supplier quality assessments, and product quality and customer reviews.

3) Optimum Efficiency Rates

Delays in manufacturing are rarely beneficial, so accessing real-time information about the availability of raw materials and manufacturing bottlenecks helps businesses to implement fall-back plans and prevent their production lines from grinding to a halt. Without access to real-time data, stock-outs and delayed shipments are commonplace.

4) Decreased Overheads

Warehouse storage is one of the highest overheads for manufacturing businesses, so SCM can help improve budget forecasts, eliminating the need to maintain large volumes of inventory. Optimising the layout of warehouses and implementing automated warehouse management solutions results in less need to store slow-moving inventory that occupies space with low revenue and facilitates the storage of high velocity inventory that drives sales and profits.

5) Managed Risks

Understanding the supply chain can expose potential risks so that businesses can design and implement backup plans if unforeseen circumstances arise. A reactive approach to supply chain problems results in a sluggish and ineffective response, whereas anticipating and preparing for issues means negative impacts can be minimised. Managing risk can also promote lean manufacturing and reduce the reliance on excessive inventory.

Hone All: Promoting Effective Supply Chain Management

At Hone All, we can help you streamline your supply chains by sourcing high-quality raw materials for the manufacture and delivery of reliable complex components, eliminating the stress and time of managing global supply chains. For more information about our services please give us a call or visit our website to understand more of how we can ease your supply chain stress.

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Topics: CNC Honing, Precision Engineering, CNC Machining

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