Supply Chain Management, is the management of goods and services including all operations that remodel raw materials into final products. Logistics is that part of Supply Chain Management that plans, executes and administers the effective and efficient flow and storage of inventory, capital and related information between the manufacturer and consumer.
The importance of fine supply chain management proved pivotal in the battle against Covid-19 pandemic that spread across the globe. The pandemic came bearing a number of supply and demand shocks. All of which have compelled the manufacturers everywhere to re-evaluate their supply chains. Amidst pandemic, countries with powerful domestic SCM had adequate medical supplies to support their needs. They could also donate their oversupply to the front-line health workers from other nations. In addition some firms were able to swiftly arrange the foreign supply chains for the much needed medical reserves. As an aftereffect of the pandemic, companies will face the burden of increasing in-house production and domestic employment along with decreasing their dependence on insecure sources. Strategies of lean inventories will demand attention and execution.
The advices mentioned below in this blog can help you sustain in the business as well as maintain the competitiveness.
The making of state-of-the-art products often includes key components or classic elements that require specialized technological skills. It is nearly impossible for one single firm to incorporate all the necessary products by itself. Consider crucial chemicals and linked reagents used for the creation of DNA and RNA sequences. For all the DNA-based drug therapies and DNA or RNA based Covid-19 vaccines manufacturing companies these chemicals are essential requirements. But the majority of the important forerunner materials are from South Korea and China. Manufacturers rely on suppliers who master just one field and those specialists in turn have to count on many others. This trade is proven to be unhealthy for two main reasons: you are left unprotected when you depend on one supplier and in case the supplier develops the product in only one area, your rate of disorganization is higher.
Critically analyzing the risk factors for your company may require intense digging. It calls for mapping your entire supply chain inclusive of distribution and transportation. This is indeed exhaustive and expensive but an unprecedented disruption that is likely to halt your business can burn a much larger hole in your pocket than looking deep into your supply chain activities will. The objective of mapping must be to ascertain how long your company can ride out a supply shortage without shutting down. Also the time it would need to arrange for alternative sources and recover from the disruption. The answers to these questions share a direct relation with the resilience capacity of your company. How flexible your manufacturing is and whether it can be revamped when the need arises.
After you have identified the risks in your SCM, you must make prudent use of that information. You can either branch out your suppliers or store up key goods.
The only way to subside heavy dependence on one sole factory, supplier or region is to add more sources in locations that are not vulnerable to the same dangers. Planting a fresh and new supplier in a different country or region will definitely take substantial time and money. The U.S.-China trade war and the pandemic has encouraged a glut of managers to progress to a new outlook for advanced production. Cutting down on China for supplies will be easier and more manageable in case of some products than others. Furniture, clothing and household goods in comparison to sophisticated electronics will be relatively easy to procure.
To safeguard your company from a sudden disruption shock, managers should hold accounts of how much extra goods will be required and in what form as well. Safety stock carries with it a mountain of demerits. It ties up cash, is not completely ethical and is contradictory to the moral performance of just-in-time replenishment and lean inventories. But the other side of the coin highlights the costs of disruption and the increased prices that would have to be paid for items that are suddenly short in supply with boosted rates. Moreover the time and effort that would go into securing such goods.
During the Covid-19 outbreak, demand in several product types witnessed a surge. Manufacturers grappled with the making of more than one kind of product and supplying several market sectors simultaneously. There was a plunge in the stock keeping unit (SKU) since different forms of the same product were added to serve different business markets. ‘More choice is not always better’ has been a long argued topic among researchers. Segregating demand into many different categories and trying to serve numerous products can cause the real scramble. Especially amid periods of shortage. Companies must look into the merits and demerits of manufacturing a wide array of product variations.
The economic turbulence caused by the pandemic has unleashed a multitude of vulnerabilities in SCM. The recession has also given birth to doubts regarding globalization. An MBA in Supply Chain Management will kit you with new eyes at the present supply networks. You will learn about the risks and ways to improve the supply chain market. Managers should not take a step back from globalization. Since doing so will leave a wonderful opportunity for other companies that did not back away. They will quickly fill the void with exuberant joy. An MBA in Supply Chain Management will prepare you to tackle such challenges and become a leader with comprehensive underpinning of all key disciplines. You will also explore the benefits of innovations and find ways to make businesses work better come what may.
It is time to observe SCM through an advanced lens adapted to the circumstances of the new business world. All in all, internationally accredited, high-caliber and superlative information filled MBA in Supply Chain Management will help you win this race.