What is the importance of supply chain management?

What is the importance of supply chain management?

Importance of Supply Chain Management
ManagementManagement StrategiesManagement Strategies on LeadershipSCMSupply Chain Management Importance

What is the importance of supply chain management?

Supply chain management is one of the most integral parts of businesses. The importance of Supply Chain Management is crucial to company growth as well as customer fulfillment. Let us know more about what it truly means and also cast light on its benefits. Supply chain management plays a pivotal role in modern business operations and has a profound impact on various aspects of a company’s success.

What is Supply Chain Management?

It is the process of monitoring the entire plan from making to delivery. In simpler words, from the start line to the finish line. A supply chain manager looks after operations involved in the change of raw materials into final products. Plan, source, make, deliver and return are the 5 basic and pivotal steps of SCM. 

Importance of Supply Chain Management:

Customers are among the most crucial assets in the economy. Without customers and their needs, the production industry can grind to a halt. So, do you not think it is vital to ensure customer happiness? This is where Supply Chain Management comes into play.

Customers have a great set of demands ready. Firstly, they expect the correct product variety as well as volume to be available. Further, they should be delivered on time and at the right location. Finally, prompt support after the sale. For example, customer service is not five stars if an air conditioner stops functioning in the summer and your company cannot deliver service for the next few days.

All of the above can be achieved with a thoroughly planned and effective Supply Chain Management. Fine SCM enhances customer service.

In Regards to Retailers and Manufacturers

Not only retailers but also manufacturers depend on the supply chain, intensely. For retailers, fast delivery of high-priced products is an important agenda. Since a delay in its dispatch would add to the high inventory costs. On the other hand, manufacturers need a timely supply of building materials. Without the same, it would be difficult for them to start production. In a worst-case scenario, material scarcity could lead to an uninvited shutdown, impacting the economy with a massive loss. Strong Supply Chain Management is the linking network between a manufacturer and a retailer. Together, they can deliver customer satisfaction at lesser costs.  

In Financial Terms

Financially, supply chain managers have a lot to accomplish. They assist in controlling and reducing supply chain management costs. To better understand, let us insert a practical approach. Say 10 people have 10 televisions in their homes. Decreasing the supply chain costs per television would result in a financial profit. And, a supply chain manager pronounces this call to action.

Additionally, they look after altering the colossal volume of fixed assets. Such as warehouses, assembly plants and transportation vehicles used. Their only aim is to save time and money, yet thrive.  

Further, an increase in the cash flow is a credit given to the supply chain managers. This profit can be achieved in a number of ways. And, one of them is to accelerate product delivery. If the delivery time is cut down to 5 days from 10 days, the firm becomes capable of billing the customer 5 days sooner. Significantly, these 5 days can be used for increased production and distribution. All in all, for more profits. 

Employment Opportunities

Every firm requires a smooth and efficient supply chain system. Skilled supply chain professionals are in-demand for obvious reasons. Besides, their need in the business industry will only increase. The different domains of the supply chain include inventory management, transportation, logistics information, warehousing, packaging and more. There are indeed plenty of employment settings with a vast number of job responsibilities.

Concerning Energy use and Pollution

Supply Chain activities rely heavily on product packaging plus product and human transportation. Cardboard waste, as well as carbon dioxide fuel emission, are two of the most unpleasant elements of these activities. To control and reduce the generation of these by-products, it is important to instill energy-efficient practices. 

Environment-friendly strategies must be a part of supply chain management to foster sustainable growth. Further, this would promote quality and profitability. As a matter of fact, liking as well. Customers have become environmentally cautious over the past few decades. If your firm uses fewer resources and yet maximizes productivity, you are sure to stand out from the crowd.

Regarding The Standard of Living

Modern and advanced supply chain infrastructure is another importance of supply chain management. Let us learn how. Well-built routes of transportation facilitate better operations. If the railroad system, airports and highway network are highly developed, it gets easier to exchange products between manufacturers, distributors and consumers. The activities run at a faster rate and lower cost. Thus, boosting the economy. At the same time, customers can purchase more products. This in turn will improve their lifestyle.


Fine supply chain management is critical to company growth & development. As we read through its importance, it is safe to say that a career in this field is a wise investment. Lincoln University of Business and Management offers MBA in SCM. The program is designed under expert guidance. And, aims at recreating the future of working executives.  If you decide to study with LUBM, you will learn state-of-the-art SCM techniques as well as build a strong professional network. Our thorough assessment modules help candidates have customized feedback. This exercise by our scholarly educators creates room for better student performance and eventually, success.


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