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Niraj Kumbhat
Manager, India
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Advantages and Disadvantages of Supply Chain Management
What are key advantages and disadvantages of SCM?
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Shubhada, India
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Advantages of SCM
There are many advantages of SCM.
#1. Minimize costs with better material handling
#2. Improved customer satisfaction with the right quality product & right time delivery of product in his hand
#3. Improve the supplier & manufacturer relationships which leads to business growth.
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Caillaud, France
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Advantages of SCM
I agree with Shubhada, and his third point. The main advantage is that it helps participants to see the whole chain and therefore to be better prepared to take appropriate decisions. This systemic approach changes the way people see the performance, and this changes their thinking and their behavior. Waste is reduced but it takes a big change in management maturity. This is the corner stone.
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Lameck Manda
Manager, Malawi
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Advantages Supply Chain Management
I agree with Shubhada, and his second point. We are in business for profit which comes thru the customer. The customer is king and needs satisfaction at a minimum cost and for the lowest price. This can be best achieved through Supply Chain Management.
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van Hooijdonk
Business Consultant, Netherlands
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Disadvantages of SCM
Hard to say, but not impossible. Every upside has a downside, also SCM.
Rubbish in = rubbish out. If an organization is not able to balance own supply with demand, it will certainly not be able to balance the supply and demand of their whole supply chain. The disadvantage is that profitable SCM is hard to implement in immature/informal organizations.
First become a formal business, before you integrate your supply chain.
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Sophia, Malaysia
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Disadvantage of SCM
Absolutely agree with Mr. van Hooijdonk, SCM can fail if both parties are not willing to share their insights, information throughout, especially conservative companies.
The first and foremost criterion for SCM is the willingness to share information, risks, and gains.
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Priya Sinha
Student (MBA), India
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Disadvantage of SCM
I agree high levels of transparency/trust are required in any SCM network. If in an entire SCM chain even one single node is hiding information, this will effect the profit and gains of the entire network which may finally collapse.
So transparency is must in SCM.
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ANUJ KUMAR SHRIVASTAVA
Manager, India
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Supply Chains Decide the Market Positions of their Members
Supply chain these days is the backbone any organization is part of.
As rightly said, the fights in the future will be amongst supply chains.
SCM is most times advantageous as it helps you to understand your Customers (Markets) on one end and your Vendors (Procurement) on the other. While in the centre lies your own organization.
Thus it gives a complete analysis of
- WHERE YOU ARE?
- WHAT CAN YOU DO?
- ARE YOU CAPABLE ENOUGH (Balancing Capacities)?
- ARE YOU GOING TO SURVIVE COMPETITION?
- THE LEAD TIME ANALYSIS
A SCM has a basic objective to make the flow of all materials smooth and RELEASE cash as much as possible. This may be in form of lower inventory levels or change processes or many other things.
Hence Supply Chain has few disadvantages per se, but your strategies need to be defined properly as any SCM model which is good for other organizations may not be right for yours...
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Haider Rabiei
Financial Consultant, Iran
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The Effect of Supply Chain Management on Customer Satisfaction
I performed research on aspect #2: Improved Customer satisfaction
The purpose of this research was the impact of supply chain management on customer satisfaction based on the contingency approach in management. The current research is applied with a quantitative approach in terms of the type of objective. Also, according to its nature, descriptive research is of the context-finding (survey) type. The statistical population of this research includes managers, assistants, specialists and supply chain experts in the Kale factory, which are about 40 people. The statistical sample is estimated to be 36 people using Morgan's table. Also, sampling was done by random and accessible method. To analyze the data, Kolmogorov-Smirnov test, Cronbach's alpha test. Regression test and SPSS software were used. The results showed:
- Supply chain integration has a significant impact on customer satisfaction
- Responding to customers on time has a significant impact on customer satisfaction.
- Timely systems have a significant impact on customer satisfaction.
- Information sharing has a significant impact on customer satisfaction.
Therefore, supply chain management has a significant impact on customer satisfaction based on the contingent approach in management in Kale company.
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Ivy
Teacher, Netherlands
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Advantages of Supply Chain Management
- COST EFFICIENCY: Effective SCM reduces costs by optimizing logistics, inventory management, and production processes. This leads to lower operational costs and increased profit margins.
- IMPROVED QUALITY CONTROL: SCM allows for better monitoring of production processes and materials, resulting in higher product quality and consistency.
- ENHANCED CUSTOMER SATISFACTION: By ensuring timely delivery of products and services, SCM improves customer satisfaction and loyalty. Businesses can respond quickly to customer demands and preferences.
- INCREASED FLEXIBILITY AND RESPONSIVENESS: A well-managed supply chain enables businesses to adapt quickly to market changes, such as shifts in demand or supply disruptions.
- GLOBAL REACH: SCM facilitates international trade and can help companies expand into new markets by streamlining logistics and supply processes.
- DATA-DRIVEN DECISION MAKING: Advanced SCM systems use data analytics to forecast demand, manage inventory, and optimize supply chain processes, allowing for informed decision-making.
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Ivy
Teacher, Netherlands
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Disadvantages of Supply Chain Management
- COMPLEXITY: Managing a supply chain can be highly complex, requiring coordination across various stakeholders, processes, and technologies. This complexity can lead to inefficiencies if not managed properly.
- HIGH INITIAL INVESTMENT: Implementing an effective SCM system can require significant upfront investment in technology, training, and infrastructure, which may not be feasible for smaller businesses.
- DEPENDENCE ON SUPPLIERS: Businesses may become overly reliant on their suppliers, which can be risky if those suppliers face disruptions, quality issues, or financial difficulties.
- RISK OF DISRUPTION: Supply chains are vulnerable to external factors such as natural disasters, geopolitical issues, or pandemics, which can disrupt the flow of goods and services.
- RESISTANCE TO CHANGE: Employees and stakeholders may resist changes in supply chain processes or technology, leading to implementation challenges and a lack of buy-in.
- DATA SECURITY CONCERNS: As SCM increasingly relies on technology and data sharing, the risk of data breaches and cyberattacks also increases, posing threats to sensitive information.
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