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Advantages And Disadvantages of Supply Chain Management

Some of the Advantages And Disadvantages of Supply Chain Management are listed below. So let us check it out some information on advantages and disadvantages to know more about supply chain management. It is the management of flow of services as well as goods and includes all intermediate processes that transform raw materials to final products.Supply chain mangement  consist of broad range of activities which is required to control, plan and execute a product's flow.

Important Points of (SCM)

Advantages of Supply Chain Management :

1. Supply Chain Management helps to increase savings in labour and procurement costs.

2. Supply Chain Management helps to achieve better inventory control.

3. Supply Chain Management is used to get better control over suppliers.

4. Supply Chain Management can increase market visibility.

5. Chances of product failure rate can be reduced by Supply Chain Management.

6. Supply Chain Management is used to provide  better information on customer needs, tastes etc.,

7. Supply Chain Management helps to achieve regular and better communication with the customers.

8. Supply Chain Management helps to improve customer care service.

9. Supply Chain Management is used to achieve higher revenues.

10.Supply Chain Management increases performance and profitability.

11.Supply Chain Management is used to lower transportation, warehousing and packaging costs.

12.Supply Chain Management increases capacity, capability or flexibility.

13.Supply Chain Management enhance value for money.

14.Supply Chain Management is used to improve reputation of brand in market.

15.Supply Chain Management also increases the value of shareholder.

16.Supply Chain Management is used for faster and more accurate order processing.

17.Supply Chain Management allows higher discount on price to wholesaler due large order size.

18.Supply Chain Management is also good  for returns and recall management.

19.Supply Chain Management is used for production tracking.

Disadvantages of Supply Chain Management :

1. Sometimes Supply Chain Management can be very expensive to implement.

2. Competitors can easily copy the strategy of Supply Chain Management.

3. For better Supply Chain Management, proper skills and experience is required to achieve success.

4. Sometimes in Supply Chain Management various functions may be difficult to manage.

5. In Supply Chain Management there may be staff resistance.

Supply chain management involves organizations, people, procedures, packaging, purchasing, delivery, checking , warehousing etc. It also helps to maintain long term relatinship with the suppliers and the distributors. 

Key business areas of supply chain management includes: Demand planning, customer servce, partnership, warehouse distribution, enterprise performance, order management and supply base management.

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