Article
Written by Will Aitkenhead
Posted on 09/04/2015

SCM to be taken seriously amongst SMEs

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The global marketplace is more volatile than ever before and as supply chains have become wider and more global, the possibility of interruptions has increased. These interruptions are further enhanced by the speed at which things happen, with minor hiccups causing major consequences. As a result, management of the supply chain needs to be taken very seriously and SMEs need to be flexible in order to cope with rapidly changing situations.

SCM

A global chain

In times gone by supply chains used to be very singular and vertical, as businesses owned and controlled their entire chain. In today’s world things are very different, with companies outsourcing and choosing to focus on core competencies, meaning they are often reliant on suppliers based on the other side of the world. This means control is even more important than before and the management of the supply chain is critical.

Research by IBM for their Global Chief Supply Chain Officer Study, which included the thoughts of 400 senior executives from Western Europe, North America and Asia Pacific, has highlighted five key areas for focus on the matter. These were:

  • Cost containment – the constantly changing nature of supply chains makes this difficult and it can be difficult for supply chain executives to adapt.
  • Visibility – with a busier marketplace than ever before it can be difficult for supply chain executives to find the right information and act on it.
  • Risk – risk management must be high on the agenda for any supply chain.
  • Customer intimacy - SMEs often find themselves closer to their supplier than customers, which is not ideal.
  • Globalisation – resulted in a focus on revenue growth rather than cost savings.

 

The path for the future

While all these changes and developments make effective supply chain management more important than ever, with these issues there also comes opportunity. To prepare for the changes, SMEs need to make sure they have the right processes in place. Easier said than done but not impossible.

With information now increasingly machine-generated the supply chain is more instrumented than ever before which also leads to a more interconnected system. In the future parts, products and other smart objects will be able to monitor the supply chain for you, allowing you to make better, more efficient decisions. Some of these decisions may even be made automatically, limiting the need for human intervention and therefore error.

Changing roles

This new kind of supply chain management involves new roles and responsibilities throughout the business. You need to think more strategically than before, optimising the global ability of the supply chain network.

You need to assess your current supply chain schedules and arrangements. If a supplier runs into trouble and you can’t make alternative arrangements quickly you could run into trouble very quickly. Adopt an open mind and realise that conditions are now significantly different to how they may have been when you first started out in the role. Your current supply chain procedures may no longer be fit for purpose and you must act soon before it is too late.

 

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