The importance of supply chain decisions

The importance of supply chain decisions can’t describe in a word. There is a close connection between the design and management of supply chain flows.  Besides, the successes of the supply chain also depend on it.

In supply chain management, all parties are directly or indirectly involved with each other to fulfill the demand of consumers. It does not include only the manufacturers and suppliers but also agents, brokers, retailers, wholesalers and customers themselves. In organizations, the supply chain involves receiving and fulfilling customer demand. It may be new product development, marketing .operations, distribution, finance, and customer service.

See the supply chain of Wal-Mart and Amazon. It will give you a clear scene of the importance of supply chain decisions. They are the most successful companies in the world. Because they are successful to manage their supply chain decisions most effectively. They have built their success on superior design, planning, and operation of the supply chain.

In contrast, the failure of many businesses must depend on effective supply chain decisions. The weak supply chain decisions can’t bring success for the organizations. Sometimes, we can see that, some companies supply chain can’t adopt them to the changing nature of the supply chain. Moreover, they also fail to meet customer expectations.

For example, Dell Computer Company has great supply chain decisions.

That’s why they become more successful than any other company. Their suppliers are much more attentive to adapt them to the changing nature of the supply chain. Because they are technologically advantaged and connected with each other. Besides, they have the capacity to meet the customers’ expectations.

Wal-Mart is the leader of using supply chain. let’s see how.  Wal-Mart has a great supply chain design, planning, and operations decisions to become a success. It has a direct link up with its suppliers. When a company established its business, it has to invest a huge amount of money for transportation and information infrastructure to facilitate the effective flows of goods and services. Whereas, Wal-Mart designed its supply chain with clusters of stores around the distribution centers. So that it can facilitate the effective flows of goods and services in a cost-effective manner.

The frequent replenishment allows Wal-Mart to match supply and demand more effectively than the competitors. That’s why It has been a leader in sharing information.   Besides, it also collaborating with suppliers to bring down costs and improve product availability.

This is so impressive.

Besides, Seven –eleven  Japan is another example of showing the importance of supply chain decisions. It has used an excellent supply chain design, planning, and operations. That’s all drive growth and profitability of Seven-eleven   Japan.  It also used a very responsive replenishment system to maintain its business. This system is to maintain information to ensure that products are available to the customers where they need them.

Besides, the failure also depends on supply chain decisions. The inability to manage supply chain decisions causes failure of the business. So, The importance of supply chain decisions is really very important for all businesses.

 

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