How Supply Chain Management Helps in Business

supply chain management
supply chain management

If you are wondering about the role of supply chain management in business then we can surely say that you will never see a business grow and succeed without a smooth supply chain.

Supply chain management is the series of interconnected activities and services that a company needs to undertake for the smooth functioning of its operations.

Having a strong supply chain management strategy can help any business to be more profitable and to grow. When it is managed effectively it can help a company to lower the costs of its production, marketing, and distribution.

Moreover, the company will also have fewer delays in product delivery and better quality products.

As we all know, one of the most important aspects of any business is its ability to meet the changing demands of its customers while keeping its expenses to a minimum.

It takes an efficient logistical network to make this happen, and supply chain strategy should be part of corporate planning. So, let’s first discuss all the functions of supply chain management to better understand its role in the growth of the business.

Functions of Supply Chain Management

The main functions of supply chain management are planning, sourcing, procurement, production, inventory control, distribution, and order fulfilment.

All these functions are interrelated to each other and therefore, a business cannot use them individually.

Supply chain management is a continuous process that involves all of these functions and hence, the company needs to integrate all these functions and processes to get the best possible results.

How does it help in business?

It helps a business to connect its various processes and departments of the organization and hence, helps to increase the efficiency of the processes significantly.

Some of the main benefits of adopting global supply chain management in a business or organization are:

  1. Cost Reduction and Reduction in Inventory:

Supply chain management helps in reducing costs and in getting the best possible prices for the products of the company. It also helps in reducing the overall inventory of the company and thus, helps to control the working capital of the company.

  1. Revenue and Profit:

By effectively managing the supply chain, a business can increase its revenue and profit by improving the communication between the company and its customers, keeping the customers informed about the new products and providing the best services and products to the customers.

  1. Customer Satisfaction:

By effectively managing the supply chain, a business can attain customer satisfaction by meeting the demand of the customers, providing the best possible products and services and making the overall experience of the customers so good that they come back for more.

  1. Competitive Advantage:

By effectively managing the supply chain, a business can attain a competitive advantage because it can cut costs than its competitors.

  1. Business Continuity:

Supply chain management also helps in the continuity of business operations by providing the ability to quickly allocate resources to the affected areas and by reducing the overall impact of the crises on the business operations and the reputation of the business.

What are some possible challenges with Supply Chain Management?

While global supply chain management provides a lot of benefits to the business, it is not without challenges. Here are some examples of the challenges that you might encounter while managing your supply chain:

  1. Lack of Communication:

Lack of communication or sharing of information among the supply chain partners can be a threat to the efficiency of supply chain management.

  1. Lack of Security:

When the supply chain is managed professionally, the security of the supply chain management is a major concern for the business. For instance, an insecure software or an insecure network can break down the whole process of supply chain management.

  1. Lack of Standardization:

Another challenge that one could encounter in the process of supply chain management is the lack of standardization. For example, if each individual in the supply chain uses different software for managing the supply chain, it will affect business efficiency.


In the past, businesses were able to source raw materials at a low cost and deliver them to the market without much hassle. However, supply chain management has become more complicated and expensive in recent years.

This is due to increasing competition and growing demands from consumers. Companies are now trying to make their supply chains more efficient and cost-effective by partnering with suppliers, using online platforms, and adopting new technologies. It is imperative to develop a solid understanding of supply chain management before starting a business.

What strategies do you use for your supply chain? Do you have any suggestions for improving your business’ supply chain? We would love to hear your thoughts in the comments below.