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Basics of Supply Chain Management for SMEs

Although the degree of importance varies from company to company, Supply Chain Management is one of the crucial functions of an enterprise. To master the Supply Chain, it is necessary to first understand the basic stages well.

WHAT IS SUPPLY CHAIN?

Supply Chain concept: It is the whole system of the relationships and connections that drive the movement of products between suppliers, producers, wholesalers, distributors, retailers and finally consumers.

“Supply Chain” is closely relates to all work processes of enterprises; all the products and services starting from the supplier and to the customer gradually moving to the last stage; tracking all activities on this path and it encompasses human resources, technology, company structures and resources.

All kinds of resources and components involved in all the activities carried out in the supply chain process are converted into products and finally delivered to the customers.

The relationships and connections that make up the Supply Chain go through a whole movement of suppliers, producers, distributors, wholesalers, retailers, and finally consumers.

Each ring of this chain regularly follows each other. Similarly, in terms of business processes, we can say that the Supply Chain is a certain stage. Valuable processes such as production, stock management, material discipline, distribution, sales, procurement, and customer relationship management enable the operation of the Supply Chain.

“For any company that produces goods, the cycle starts with purchasing and the entire supply chain is well planned and managed through a good supply chain management. Businesses that cannot properly manage the procurement process face a challenge, such as not being able to deliver, because their order in their hands is incomplete.”

BASIC STAGES OF SUPPLY CHAIN

In the management of the Supply Chain, all chain-forming functions must be integrated. A number of functions fulfil specific tasks in the direction of six key objectives when products reach the supplier end user:

Demand and order management: The organization of business activities to ensure that orders from customers are executed quickly and smoothly.

Procurement: The supply of all the products and materials required for production in the best quality, fast and reliable way.

Planning: Planning the entire production process together with cost calculations in the business activities.

Production:The most important process on the business side of the Supply Chain. It is the conversion of the previously purchased material to the low-cost product within the required time and performance with the right tools. In the economic literature, production is described as everything intended to increase the quantity or utility of goods and services.

Inventory management: Determination of stock levels of all necessary materials in accordance with prepared production plans and efficient management.

Warehouse management:Designed for maintenance of inventory management; how and in what quantities the stocks are stored; the storage of finished products and the maintenance of ready-made supplies.

Shipment (Transportation): It is the management of the process of delivering finished products to the customer by taking the goods from the warehouse ready for sale.

QUESTIONS YOU NEED TO ANSWER FOR SUPPLY CHAIN MANAGEMENT

1- What are the products and services you need to produce to fulfil your business activities?

2- At what level should the quality and price scale of the products and services of this product be?

3- Who are the suppliers that can supply your products and services?

4- How will your products and services come from supplier’s market situation, awareness and competitive position?

5- Are alternative foreign market options to internal market?

6- Are there cost savings advantages in advance purchase for futures purchases?

7-At what level will you buy products and services and what are the price changes due to changes in the markets scenario?

8- Which is the most accurate communication method with suppliers?

BENEFITS OF SUPPLY CHAIN MANAGEMENT

Ensuring Supply Chain Management with the right tools and in a reliable way will make numerous benefits to the company in every process. In order to grow your business and increase your profitability, we can summarize the benefits that the Supply Chain Management can offer:

USE INFORMATION AND COMMUNICATION TECHNOLOGIES EFFECTIVELY

In the field of Supply Chain Management, the use of information and communication technologies at every stage has become very important. In order to satisfy each of your customers and your suppliers, Supply Chain Management solutions from Logo Software have the capabilities to meet your every need.