Question

Discuss the importance of why global supply chain management is so important to a company's success

which does business internationally?

Answer 1

SUPPLY CHAIN MANAGEMENT

Supply chain management(SCM)is a highly detailed system used by small and large organisation alike to get products to consumers, from obtaining raw materials, manufacturing and delivering the final product to the customer.A well organized supply chain management system involves optimizing operations functionality to be fast and efficient.Supply chain management has the power to boost customer service, reduce operating costs and improve the financial standing of a company.

SCM = Raw materials Supplier Manufacturing Distribution Retail location Customer

IMPORTANCE OF GLOBAL SUPPLY CHAIN MANAGEMENT TO A COMPANY'S SUCCESS

Today most of the global companies are forced to keep looking for a production center where cost of labor and raw material is cheap and in order to complete in the global market and networked economy, SCM is very helpful for organisations.Various activities are there in an organisation which needs strategic management like sourcing of raw materials from different place and then from different locations these finished goods are passed through different chains of distribution network which includes retailers, distributors and customers.

SCM plays a vital role in organisation activities and an essential element to operational efficiency which can be applied to customer satisfaction and company's success.Other benefits and importance of SCM are :

• Provides efficient manufacturing strategy.
• improves process integration.
• Increases cash flow.
• Improves quality and gives higher profit margin.
• Effective flow goods and Information-Companies like Walmart who have invested heavily in transportation and information infrastructure help in achieving effective flow of goods and information.
• Reduces the inventory cost-Dell centralizes manufacturing and inventories in a few locations and postpones final assembly until order arrive.Thus Dell is able to provide a large variety of PC configurations while keeping very low level of inventory.

Thus it is clear that global Supply chain management have an important role in the success of business.