How your supply chain determines your product's fate
The understated importance of Supply Chain Logistics
Creating a physical product is always a labor of love and hard work. There are so many elements that go into creating a successful product. From the design to the production, every aspect has to be implemented perfectly to have the right results.
There are constant worries present during every aspect of the journey. From the creation of prototypes to the marketing, each phase of the production of physical products has its own importance. However, Supply Chain Management is arguably an important aspect of creating a physical product.
What is Supply Chain Management?
Supply Chain Management is defined as the process of managing the flow of general goods and services. The term involves every part of the process that goes into transforming raw materials into finished products. The general process encompasses the compares the range of actions and activities that are helpful in maximizing the value of customers and getting a competitive edge.
Generally, Supply Chain Management is an effort by companies to effectively develop cost-effective supply chains to maintain the proper supply of their products. The process involves every aspect from basic design to complete products and management.
The importance of properly managed Supply Chain Logistics cannot be understated. It is the essential bridge that must be properly established to properly manage the supply and demand of your product.
Even if you have the best product in the world that everyone wants, the demand is useless if you are unable to meet the supply. That is why it is important to have the right Supply Chain Logistics system in place to ensure that your product is always out with your retailers, distributors, and customers on time.
How do Supply Chain Logistics impact my business?
Supply Chain Logistics is integral in improving different areas of your business. Here are some of the major ways Supply Chain Logistics impacts your business.
Increased market coverage
By having a streamlined supply chain and rapid dispatch of products, you're successfully giving yourself the room to push forward into new markets and cover larger areas of demand.
Increased market coverage is integral in expanding the sales of your physical product in new territories and growing its impact. This is extremely important when you are trying to expand the market of your product in the beginning. Having the right logistics in place gives you the room to have growth and eventually expand on the demand your product has.
Higher Customer Satisfaction
For any business to be successful, customer satisfaction has to be the number one metric. Nothing is worse for customer satisfaction than having delayed deliveries.
But to understand the important metrics behind customer satisfaction, it is important to understand key customer expectations.
- Customers are always going to expect the right product type and quality to be delivered.
- Customers expect product availability at the right locations. It is important to realize how long your stock is going to last.
- Customers expect on-time delivery.
- Customers expect proper after-sales support when they require assistance.
Ironing out your supply chain logistics is a great way to meet customer expectations as it allows you to get a step closer to timely deliveries with correct specifications.
By effectively sorting out the production and delivery mechanism of your products through supply chain logistics, you are less likely to have delays in product delivery and specifications. This massively increases your customer satisfaction rating allows you to revel in the higher customer re-purchase rates.
Reduce operating costs
Arguably, the greatest benefit of supply chain logistics management is the massive impact it has on your operating costs. Here is how efficient Supply Chain Management massively reduces your operating costs.
Lower cost of purchase
Retailers effectively reply to rapid deliveries of expensive products to avoid keeping costly inventories. Due to the nature of expensive products, it is important to have a rapid delivery to avoid long inventory storage times and eventually have a lower cost of purchase for retailers.
Lower production cost
If your product is a part of the manufacturing process for another company, it's essential for them to have timely deliveries so that they can count on the product. Unexpected shortages can be detrimental to the whole production process and lead to massive delays. Streamlined deliveries allow you to have a much lower Production Cost.
Decreased cost of general supply chain
Managing the supply chain can be a costly affair. From the initial production costs affiliates with the delivery to the customer-affiliated cost. Having a speedy supply chain allows you to massively save on the costs in involved your logistics and supply chain. From the transportation cost to the manpower involved, streamlining your supply chain is a great way to save major costs associated with your supply chain.
Impact of Supply Chain Logistics on digital sales?
With the rapid growth of digital markets and platforms, the need for effective supply chain logistics is stronger than ever before. Due to the increasing usage of digital platforms like Amazon and eBay, customers are now rapidly getting acquainted with streamlined delivery timings. This is a major increase in the quality of expected products and their delivery because of the influx of competition involved in the sales of these products.
International shipping is now another consideration that needs to be considered in the production and delivery of today’s products. It is essential to consider the reach and delivery of your physical products across multiple locations and avenues.
According to recent research, “24.7% of supply chain professionals say that delivery costs are the biggest challenge for B2C e-commerce companies”.
This paints a clear picture of the challenges posed by supply chain logistics to the sales of physical products. Transportation and delivery and essentially one of the most challenging aspects to incorporate into business strategies and make considerations to meet the challenges posed by the high delivery and quality standards demanded by consumers.
Despite all the challenges posed in supply chain logistics, it is vividly clear that the challenges offer an opportunity to improve and capitalize on the wide margin offered by the potential quality improvement in supply chains.
How do you improve Supply Chain Logistics?
Here is how you can improve areas of Supply Chain Logistics to generally improve the functioning of your business.
Improve your distribution network
Your distribution network is the focal point of your supply chain logistics. It is important to have an efficient distribution network. The distribution network is at the central point of your sales strategy and efficient delivery. It is important to implement modern delivery tracking systems to ensure that the deliveries are being carried out in a timely manner. A holistic or cluster approach can be used to efficiently evaluate and improve the system.
Implementing digital tools
With the massive improvements in technology over the years, it has now become a mandatory tool to optimize supply chain logistics. From delivery tracking to inventory management, every aspect of supply chain logistics today is impacted by digital tools.
Utilizing digital tools can be a great way to have a streamlined overview of the deliverables and maintain transparency throughout the supply chain delivery process. These tools can also be a great way to introduce accountability into the general system and add a layer of further trackability of goals.
Monitored cash flows
Monitoring cash flows is instrumental in improving the management of suppliers. It is extremely important to have a clear track of incoming payments and other terms and conditions settled with certain fundamental groups within the supply chain.
The general understanding of the payment mediums, terms, and conditions is an essential part of the process in ensuring smooth business growth while propagating your product forward.
Creating an efficient product is now easy. Growing it to large audiences is much harder. Having the right supply chain logistics in place allows efficient management and facilitates growth towards your future ambition. It is important to be on top of all the challenges to ensure that your product is going to reach its maximum potential.
Use talented professionals to help with your supply chain logistics
Using supply chain professionals can be a major help in improving your supply chain. By getting detailed evaluation and consultation on your existing framework, you can curate a much more improved way forward for your company to have an improved supply chain. Dedicated supply chain professionals can be really expensive. That is why it’s a great idea to hire freelance professionals to assist you. They can be a great way to have a cost-effective service without committing to a full-time employee.