Integrated supply chain management (SCM) solutions are fast becoming the norm for companies of all sizes, but what is it about this approach that benefits the business? Before discussing the benefits, let’s get introduced to the core idea behind integrated SCM approach first.
An integrated supply chain management solution allows a business to control, facilitate, conduct, and manage all aspects of their supply chain from a unified, central platform. This streamlines the entire supply chain management process by eliminating the need to work with and manage several, separate systems. As a result, the following benefits are noted.
Collaboration and Transparency
Seamless collaboration and transparency between the various departments are the effects themselves, and not the benefits as such. However, when and if a company is able to collaborate seamlessly with perfect interdepartmental clarity, it leads to several consequential benefits such as:
- Improved cross-departmental communication.
- Massive improvements in TAT and response time.
- Cost reduction and efficiency.
- Improved inventory management and reduced waste.
- Improved profit margins.
- Better customer satisfaction stemming from improved TAT and response time.
Better Demand Management
Intelligent demand management is crucial for any business, and an integrated SCM solution helps improve it. Due to the transparency it provides to every connected part of the supply chain, demand can not only be fulfilled at the earliest, but demand trends can also be estimated and prepared for in advance. Naturally, this has tremendous potential for boosting sales by having the right inventory at the right time, especially during crunch time.
Disruption of Divisive Corporate Leadership
Divisive corporate culture is a huge drawback for any business, as it keeps the company from progressing as a single unit. Yet, it may at times be unavoidable, unless the high leadership takes necessary actions for addressing the situation. An integrated supply chain management can be one of those steps because:
- Unified SCM solutions work directly against divisive culture, as it works on the very principle of collaborative culture.
- In order to work as a functioning part of the integrated system, each department must share information and resources with each other.
- If departmental leaders are not willing to collaborate, they will create a visible bottleneck in the system, which will be evident to all connected departments.
- Taking the necessary actions to address the bottlenecks in logistics become easier, when the problem areas are easily identified.
It should be noted that the benefits of integrated and unified systems are not necessarily limited to supply chains alone. The benefits of lean management apply to any and all departments within a business. The less there is to manage separately, and the more time can be saved by eliminating unnecessary stops and knowledge gaps, the more productive that section of the company will eventually become. However, the effects of improved collaboration and transparency are best experienced in supply chain management since SCM involves so many moving parts.