The concept of Supply Chain Management (SCM) encompasses all of the processes required to transform raw materials into final products. It’s a multifaceted approach that requires a cross-functional approach, Regulatory requirements, and cost control. There are also career opportunities in this field. Read on to learn more.
Regulatory requirements
Compliance with regulatory requirements is a crucial element in supply chain management. If your supply chain is not in compliance, your business can be held liable for financial losses, reputational damage, and even expensive lawsuits. Because of this, it is important to ask the right questions about your supply chain and demand that your third-party vendors perform checks on their compliance posture.
One way to comply with regulations is to create and maintain effective internal controls. Many of these controls are not directly related to financial management, but rather focus on processes that go beyond financial controls. These processes could include insecure communications, poor purchase commitment visibility, or inventory write-offs. Regulatory requirements also require organizations to identify and report any material events. These events may include delays in delivery of products, inventory write-offs, or system crashes.
These requirements can be difficult for small companies to meet. These regulations often involve more than one level of suppliers, making it difficult for them to maintain transparency throughout their supply chains. In addition, these regulations are costly and time consuming, and a single detail out of place can lead to fines.
As global regulations continue to develop, companies need to be prepared for these changes. New technologies, such as Coupa, can help companies meet these challenges. Using Coupa’s supply chain management software, companies can manage third-party risk and monitor their vendors, distributors, and resellers. These solutions can also help companies model decisions and understand their impact on their business.
Compliance management is a crucial part of a resilient supply chain strategy. This approach involves visibility, transparency, clear communication, and collaboration with all stakeholders throughout the supply chain. The consequences of non-compliance can negatively impact your business reputation and bottom line. Therefore, it is imperative to maintain a 365-degree view of your vendors. This will help you discover, evaluate, and resolve any issues that may arise.
Regulatory requirements for supply chain management are not always easy to meet. The complexity of supply chains and the weak rule of law make it easy for global businesses to ignore their responsibility. Banning trade with suppliers from risky areas is not a practical solution. It would also compromise the economic development of millions of people. Fortunately, there are two methods to address the complexity of supply chains: compliance management through “soft law” with guidelines and mandatory due diligence mechanisms.
Cost control
Cost control is an important component of supply chain management. It affects several components, including transportation, labor, and storage. Companies must plan ahead and make changes to minimize costs. Planning can also improve the predictability of a company’s operations, which can help it manage costs better. For example, companies can anticipate a one-time event and make changes to meet demand.
Another component of cost control is procurement. Choosing the right supplier is important to keep procurement costs low. A good supplier will provide the right products and services at the lowest price. On the other hand, a bad supplier could cause an issue that compromises the company’s reputation with customers. By implementing cost control measures, companies can improve overall efficiency and profitability.
The goals of supply chain cost management are to align costs with business value, profitable growth, and compliance. To achieve this, supply chain leaders must adjust their engagement with key stakeholders and propose initiatives that will drive breakthrough cost reductions. They must also build a collaborative environment around cost-optimized operating outcomes. In addition, they must develop cost analysis models that focus on specific operational outcomes. This will enable them to justify their investments based on the likelihood of improving specific outcomes.
Supply chains are often global networks, spanning different locations. Because of this, companies must constantly make strategic decisions about where to invest resources and facilities. Many companies fail to do this and end up spending money in the wrong places. This can have a profound effect on their financial health. As such, it is essential for companies to consider cost control when making strategic decisions.
One of the most overlooked strategies in supply chain management is tracking inventory costs. Many companies change their supply chains but do not track the results. If they are trying to reduce costs, they will need to measure their current supply chains and compare them to the best ones. This information can provide a clear picture of how well the supply chain is performing. It is also crucial for forecasting logistics, stock renewals, and base supplies.
A comprehensive cost control method incorporates three process steps: pregeneration prediction, production-stage adjustment, and postproduction analysis. In addition, it includes the use of a standard cost law, an activity-based cost rule, and repeated accounting. These four stages are used to judge the effectiveness of the cost control process.
Cross-functional approach
In today’s complex environment, supply chains are under pressure to provide great customer service. Digitalisation has created new business opportunities but also new challenges, which require a cross-functional approach to supply chain management. To ensure success, supply chain teams must be able to work together to find solutions to these challenges. They must also align their work to the triple bottom line approach.
Supply chains provide significant competitive advantage if planned and executed in a coordinated manner. This requires the close attention to all relevant details, as even the slightest change can have a significant impact on the final result and precondition the emergence of unexpected problems. In order to develop an effective supply chain management strategy, organisations must evaluate the current market, the power of their suppliers and their ability to provide quality materials. Furthermore, companies must consider their ability to offer the best prices and terms for shipments.
A cross-functional approach to supply chain management focuses on the entire value chain, from raw materials to finished goods and from end-consumer to the customer. This approach also emphasizes quality, which is the ability to meet the needs of customers consistently. The overall quality of a developed product is directly related to the quality of the production process. Moreover, cross-functional teams can help companies avoid costly mistakes and unnecessary spending.
Whether a cross-functional approach to supply chain management is right for a company depends on the structure and the methods used to implement it. Cross-functional teams should be able to execute new ideas with technical excellence, and they should be able to orchestrate cross-functional support.
As part of cross-functional teams, people from different disciplines need to work together. They should have clear goals, assign roles and work toward them. They should also be trained in effective brainstorming techniques. By incorporating cross-functional teams, companies can foster creativity and improve existing processes. They can improve the overall efficiency of the organization.
Companies that have not centralized their supply-chain organizations may be suffering from an inability to coordinate their activities. This can result in single functions reporting to different parent functions or different points within the parent functions. Moreover, processes may not be streamlined to work together, which slows response time to urgent matters. One example of such a situation is demand planning, which can report to supply-chain leaders in some geographies and to sales leads in others. This lack of clarity creates barriers to cross-functional execution and can lead to confusion.
Career opportunities
If you have an interest in supply chain management, there are a number of options for career development. Career opportunities within this field include working for a manufacturing company or for a wholesale or retail company. Each has its own specific requirements, but if you have an interest in the general field of supply chain management, you may want to consider an internship.
As supply chains become more complex, supply chain managers will need to understand a wide range of technical processes and be able to explain these to customers and non-technical people. People who grew up with the internet will also be well-positioned to understand the dynamics of online shopping, which will continue to grow in importance.
Supply chain management involves several functional areas, including planning, controlling the flow of goods, and logistics. These areas are vital to today’s businesses. Career opportunities in this field can range from clerical positions to management positions. There are many different paths to take within this field, so it’s important to understand what is available before choosing a career. If you’re interested in a career in supply chain management, start by considering a career in logistics.
Other opportunities include working as a purchasing manager, where you’d oversee purchasing agents and oversee inventory management. In order to enter this field, you’d need a bachelor’s degree in supply chain management. You can also work as a supply chain consultant, where you’d be responsible for managing the supply chain for a company.
Supply chain management careers can be very diverse, with opportunities for entry-level positions as well as senior-level positions. Many supply chain management professionals choose to specialize in a particular area, while others focus on the whole field. There are many opportunities for advancement, especially if you have the right education. Typically, a bachelor’s degree in business administration with a supply chain management specialization will prepare you for these positions and sharpen your practical skills.
In the supply chain, data management is an integral part. It helps supply chains work efficiently and effectively. If you love playing with data, you may enjoy becoming a data analyst, data administrator, or a statistician. The Association for Supply Chain Management has an annual survey that predicts employment and salary growth rates in supply chain management by 2020.
