Advantages and Disadvantages of Supply Chain Management

Advantages of SCM
Shubhada, India, Member
There are many advantages of SCM.
1. Minimum costs with better material handling
2. Improved Customer satisfaction with the right quality product & right time delivery of product in his hand
3. SCM improves the supplier & manufacturer relationship which leads to business growth.

Advantages of SCM
Caillaud, Consultant, France, Member
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.

Advantages Supply Chain Management
Lameck Manda, Manager, Malawi, Member
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.

Disadvantages of SCM
van Hooijdonk, Business Consultant, Netherlands, Member
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.

Disadvantage of SCM
Sophia, Analyst, Malaysia, Member
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.

Disadvantage of SCM
Priya Sinha, Student (MBA), India, Member
I agree Transparency is highly 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.

Supply Chains Decide the Market Positions of their Members
ANUJ KUMAR SHRIVASTAVA, Manager, India, Premium Member
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...