Supply Chain Management: the basis for efficiency, productivity and profit

Streamlining production and reducing waste: these are the main focuses that supply chains seem to be concentrating on following these years of uncertainty. But to achieve these two goals, it is essential to define management methodologies designed down to the last detail, which is why Supply Chain Management (SCM) is becoming increasingly central to companies.

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If properly applied, SCM can lead to benefits not only in terms of time and cost, but also in terms of production efficiency and profit. So what is it all about? Supply Chain Management, an acronym that has been used since the 1980s, refers to a set of techniques and methodologies that enable the distribution chain to be planned and managed in the best possible way, with particular reference to the logistics phases. The SCM also aims to integrate the Supply Chain with the relations management between the actors involved, from intermediaries to suppliers, right up to the end customers.

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THE SUPPLY CHAIN MANAGEMENT EVOLUTION

The SCM has undergone an unavoidable evolution over the decades: whereas before, management was mainly concerned with the internal ‘microcosm’ of a company, an entity that was considered as a stand-alone player in the market, today it is essential to look at the context in which the company operates, opening up the view to all the interconnections generated along the production chain and the wide panorama in which it operates.

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This has been driven by globalisation processes, as well as by the introduction of technologies pervading every production sector, highlighting the benefits of coordination between actors. Not surprisingly, nowadays, we speak of Smart Logistics, in other words, logistics optimisation through the exploitation of the most advanced technologies with the purpose to improve the work phases along the entire distribution chain: from incoming goods to the warehouse, to distribution, passing through all processes monitoring.

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Smart Logistics is one of the central pivots on which Supply Chain Management must be based today, as it is the key to automating production processes, enhancing effective decision-making, reducing errors, increasing operational flexibility and boosting the collection as well as the sharing of data across all Supply Chain levels. Integrating digital solutions with SCM allows the company to have an overview of the entire production chain, thus being able to identify and anticipate possible criticalities, and better manage the coordination of all the actors involved.

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THE ADVANTAGES OF SUPPLY CHAIN MANAGEMENT

• Coordination between Supply Chain levels and more efficient communication flows among the actors involved;
• Performance monitoring to improve and streamline production processes;
• Increased effectiveness in decision-making processes;
• Improved forecasting capacity and consequent integration of demand and supply;
• Error reduction, waste reduction and cost rationalisation;
• ‍Optimisation of the final services offered to the Customer;
• Enhancing the company's competitiveness in the market by differentiating it from competitors.

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