Knowing all the activities and systems that are involved in supply chain management makes it possible and easy to manage them. Effective management creates a competitive advantage. Knowing the different links that connect each individual element is necessary since failure to do so can result in a break of the chain, which means that the product will not reach all the users. Each person within the supply chain must know his or her role, but different people within different systems have to work together. This enhances effectiveness, and it ensures that there are no role conflicts. The fact that products can be recycled and reused has had a significant benefit for different people and systems involved in the supply chain. This means that manufactures no longer have to be concerned about getting additional raw materials for all processes. It is also an advantage since it benefits the environment. With the recycling and reusing of the already manufactured products, fewer products are disposed, and this benefits the environment.
Efforts by organizations to offer warranties and other services improve the level of customer satisfaction. It has also improved the quality of products as manufacturers ensure that customers and other end users will not find a reason to return the products. Organizations within the supply chain are no longer just concerned about their direct customers. However, changes in business operations have necessitated the need for organizations to be concerned with all parts of the supply chain. Access to information has increased, and there has been greater customer empowerment, which means that customers have more say in the quality and cost of products. Developing the right information systems will change the supply chain, as it will reduce some of the activities and processes.
Information technology has become an essential component in almost every business organizations. It is constantly changing and improving, and businesses have to be aware of the changes that occur. It has made it possible for people to have the information they need, and this contributes to decision making. Some customers take the time to learn more about the people they intend to do business with, and the internet is an effective way to enable them to do this. People can find both positive and negative information about a company from the internet. Customers, suppliers, and other people within the supply chain make decisions about a company based on the information they have towards it. This factor points out the need for companies to ensure that people have the information they need concerning the company.
In many cases, the organization is the only capable entity of providing credible and reliable information. Since there are different sources of information available, companies can control information about them, by ensuring that the customers get the information they need first from the company sources before searching in other different places. As such, companies should have websites where they list different things concerning the company, give the website visitors and other customers the chance to communicate with them, and provide a feedback mechanism where customers can offer their opinion and suggestions concerning different products and give customers the opportunity to complain about a product. The increase in the use of social media has not only attracted individuals, but also companies and other entities. Using social media enables companies to release information in a quick way; hence, customers know what is going on about a company.
The use of the internet causes a significant level of concern among people, especially because of privacy breaches. Some people have had to deal with the issue of identity theft, whereas others have had to deal with credit card fraud. It is necessary for companies to develop secure systems. This requires a constant review and update of the systems. Companies have to know the right time to release information. Information that is shared too late may be of no use to the customers, and it may have negative consequences. Communication is an essential process, and the information systems will make it possible for people to communicate easier, faster and more efficiently. Effective communication leads to better relationship building between the company and other stakeholders.
Having a supply chain that is well managed quickens the passage of the inventory from different levels and this reduces the amount of inventory held in the chain. It also reduces the overheads and the lead-time. This is important as customers have become increasingly demanding. The increase in competition among different companies has changed the customers’ perspectives towards the services they receive. Customers are no longer patient with ineffective and poor service, and they expect companies to deliver services and products when required to do so. Customers also demand that products should be at the right price. Companies can no longer afford to deliver products at high prices. The availability of different substitutes and the effect of globalization have contributed towards lowering the prices of different commodities. Thus, companies have to invest more in research as they try to find cheaper ways of manufacturing their products.
Companies have to know the information they release to people. Some companies do not share the information they have with others in the supply chain, and this has limited them in different ways. Sharing of information makes the companies more accessible, and it creates a competitive advantage. Companies with the right knowledge on the use of technology have been able to use it to their advantage. Some of them have chosen to engage in electronic commerce, which has changed the way businesses operates and increased the level of competition. Electronic commerce has made it possible for customers to get products irrespective of the time and place. Therefore, companies that do not have an electronic platform risk losing their customers to their competitors who have adopted the use of e-commerce. E-commerce has eased business processes since they are automated and paperless. Consequently, companies save a lot of money in the process, and they do not need to employ many people to perform different functions.
The use of electronic data interchange has several benefits such as ease in communication and increased productivity, although companies have to be aware of security concerns. Companies storing and sharing information have to be careful so that information only reaches the intended people. Some people do not have the right intentions, and they can use the information from companies for other purposes. They can harm the computer systems and find ways of getting the information they need. Therefore, companies need to invest more resources towards ensuring that their systems are protected and secure.
Companies have to choose the supply chains that are beneficial to them. This will not only enable them to save on costs, but also ensure that they are able to optimize their processes and systems to the highest level. It will enable them to provide the necessary services to customers in the best way possible. It is necessary for organizations to have a clear understanding of the internal supply chain since it can be complex because of all the multiple links. Organizations that understand their internal and external supply chains know when and where to make improvements. Companies intending to improve their supply chains should know all the logistics involved, and they should make sure that customers have access to this information. Logistics can be expensive for businesses. Therefore, companies should only consider the activities and operations that add value.