Does Supply Chain Management Apply To Small Business-jessica rabbit

Business The fundamentals of supply chain management are applicable to all organizations. Through proper alignment and synchronization, businesses of any size can be assured of receiving the best value in their supply chain. By implementing simple strategies, companies can achieve significant cost savings that improve profitability. Supply chain management seems complex to most people who may not realize supply chain management is a part of our business and personal lives every day. Fourteen functional areas make up the procurement process that increases customer value and improves profits. The Institute of Supply Management states the fourteen areas include the following: purchasing, sourcing, logistics, quality management, inventory control, material management, transportation, disposal (recycling), warehousing (storage), distribution, receiving, packaging, product/service development, and manufacturing supervision. We use different strategies to ensure we are getting the best value for our money. An end-to-end supply chain analysis allows us to look at how we serve the customer to achieve the best value. Supply chain management applies to small businesses, even those with 1-3 people, because each business contains several, if not most of the functional areas discussed above. Leveraging the buying power of a consortium of small businesses provides opportunities for bulk discounts. If a small business wants to purchase copier paper, then he or she should contact other small businesses that also need copier paper. Based on the bulk order of the group, a vendor will provide best value pricing that would not otherwise be achieved with a single order. Best value may include cheapest price, but could also include free delivery to all members of the buying group. Business owners would rather have employees working with customers than picking up supplies. In addition to copier paper, small businesses can work together to achieve bulk discounts not only in finished goods, but also in services, such as janitorial or fleet maintenance services. Purchasing through a consortium of non-competitive businesses is an example of the strategies that can be easily implemented. Analyzing the supply chain is the first step in an effective supply management program. According to the Institute of Supply Management, a 2.5% savings in procurement costs equals the same amount of profits as increasing sales by 10%, so when sales are flat, business should consider efficiency within the supply chain as a way to maintain profitability. Copyright (c) 2010 Randall Mauldin About the Author: 相关的主题文章: