The supply chain is the process that includes manufacturing and distributing the final product of a company. It is a network of suppliers, organisation, technology, resources, and activities involved in a business.
The supply chain includes the following steps –
- Purchasing raw materials.
- Product development.
- Manufacturing goods.
- Warehousing.
- Maintaining proper inventory.
- Distribution of the products and services.
Supply chain management (SCM) refers to optimising all these steps to run a business efficiently. Every businessman should know about it to handle their firm even more efficiently.
SCM involves proper invigilation, rectifying loopholes, enhancing efficiency in the chain. This not only helps the business run smoothly but also affirms the success of a company. It benefits the business by maximising customer value and achieving a competitive advantage in the market.
Although the concept of the supply chain has existed for ages, the idea of paying attention to it as a business strategy is new. Entrepreneurs today consider SCM as a core part of business development.
The recent research report on supply chain management
In India, SCM has picked up momentum due to the expansion of the domestic economy, as a result of globalisation. The APICS research department had conducted a survey on the recent supply chain strategies.
Some of the trends observed in the study were –
- About 33% of the respondents adopted the strategies within the last few years. This means that the current supply chain strategies are somewhat still new.
- About 58% of the people do not understand the difference between supply chain strategy and SCM.
- A number of professionals do not consider the concept as an upper hand to achieve a competitive advantage in the market.
- Organisations with job roles related to SCM are more likely to refer to supply chain strategy while recommending or working with partners, as compared to large organisations which rely on job-related strategies.
- Majority of operations management professionals are skilled and experienced in their task. They know where the chain is more aligned, less aligned, or neutral in terms of the goals of an organisation.
Investment in SCM
Investing in the process has also become a necessity and a priority. Opting for advances from financial institutions is one of the most sought-after options to fund SCM and other expenses in a business.
Typically, businesses can avail two types of external funding for SCM –
Business loans
Eligible entrepreneurs can avail a business loan of an amount up to Rs.30 lakh, without having to pledge any collateral. Such loans are provided by NBFCs like Bajaj Finserv.
They also extend unique pre-approved offers, which facilitate a simple and hassle-free process of applying, approving, and availing a loan. These offers are available on advances such as business loans, personal loans, and home loans.
Since these advances do not come with end-use restrictions, the entrepreneur can employ the availed fund in any part or process of the business. It also ensures that the company never runs out of funds and has sufficient capital to back basic expenses and the hidden costs involved in running a business.
Supply chain financing
Supply chain finance is a short-term credit, which helps optimising working capital for the buyer as well as the seller. It is a technology-based financing process in business, linking the various parties involved in a transaction to lower the expenses and enhance business efficiency.
For entrepreneurs looking to grow their business, it is essential to concentrate on supply chain management. The concept of SCM might appear complicated at the first go. However, once you start incorporating it in your business, the ins and outs of the concept appear simpler. It helps your business achieve the perfect balance between cost-effectiveness, customer satisfaction and competitive advantage.
