8 key benefits of effective supply chain management

2. Today’s global supply chains are increasingly complex,
making a data-driven approach to supply chain
management a must. Data-driven SCM provides visibility
from end to end for monitoring the flow of information,
services and goods from procurement to manufacturing
and delivery to the end consumer. Data isn’t the only
driver of effective supply chain management; other factors
such as good vendor and supplier relationships, effective
cost control, securing the right logistics partners and
adopting innovative supply chain technologies make a big
impact, too.

3. Supply chain optimization isn’t a simple undertaking, but
effective SCM offers numerous benefits that improve the
bottom line. Here’s a look at eight of the most important
benefits of effective supply chain management.

4. BETTER COLLABORATION
Information flow is a prominent challenge for companies.
According to Oracle, 76% of companies lack an automated
flow of information across the supply chain, and half of
companies say fragmented information results in lost sales
opportunities. Integrated software solutions remove
bottlenecks and allow for the seamless sharing of
information, providing a big-picture view of the supply
chain from end to end. Thanks to improved access to data,
supply chain leaders have the information they need, in
context, to make more informed decisions.

9. IMPROVED QUALITY
CONTROL
Companies that have greater control over not only their
direct suppliers but also their suppliers’ suppliers benefit
from improved quality control. Implementing standard
minimum quality criteria, for instance, enables direct
suppliers to identify and partner with secondary suppliers
that meet those requirements. Likewise, process
guidelines can help suppliers comply with your
company’s quality requirements. Some companies go
beyond simply providing criteria, conducting periodic
audits or requesting documentation verifying suppliers’
compliance steps.

10. Hafeez recommends implementing a Management
Operating System (MOS) for monitoring key
performance indicators including:
 On-time delivery
 Scrap rates, reworks and similar issues at suppliers
 Final product quality (as received by end customers)
 Time for complaint resolution
 Findings from supplier quality assessments
By analyzing performance data, companies can partner
with the highest-performing vendors and suppliers to
maintain strict quality control.

13. Tech Quality Pedia
Quality Assurance and Quality Control
Tech Quality Pedia
Quality Assurance and Quality Control
Quality Assurance and Quality Control

14. Quality Assurance and Quality Control activities are part
of a Quality System or Quality Management System. QA
includes QC.
QA contains all those planned and systematic actions
necessary to provide adequate confidence that a product
or service will satisfy/fulfill given requirements
for Quality.
Quality Control is a set of activities for ensuring quality
in the Products.

15. Quality Assurance Quality Control
Definitions
Quality Assurance is a set of activities for
ensuring Quality in the Processes by which
products are developed.
Quality Control is a set of activities
for ensuring quality in the
Products. The activities focus
on identifying defects within the
actual products produced.
Goal
Quality Assurance’s goal is to
improve development and test processes so
that defects do not arise when the product is
being developed.
Quality Control’s goal is to identify
defects after a product is
developed and before it’s released.
Focus on
QA’s goal is to prevent defects with a focus
on the processes used to make the product.
Therefore, it is a Proactive quality process.
QC’s goal is to identify and correct
defects in the final product.
Therefore, it is a Reactive process.
How
To build a good quality management
system and the assessment of its adequacy.
Periodic conformance audits [System,
Process, and Product audit] of the operations
of the system.
Finding and eliminating sources of
quality defects/issues through
tools and equipments to meet the
customer’s requirements.

16. Quality Assurance Quality Control
What
Prevention of quality problems through
planned and systematic activities including
documentation [SOPs, FMEA, CP, and WIs, etc.]
The activities or techniques used to
achieve and maintain the product
quality, process, and service.
As a Tools QA is a managerial tool QC is a corrective tool
Responsibility
Everyone on the team i.e. all
functions/departments are involved in
developing the product is responsible for QA.
QC is usually the responsibility of
a specific quality control team that tests
the product for defects.
Statistical
Techniques
Statistical tools and techniques can be applied
in both QA and QC. When they are applied to
processes [process inputs and operational
parameters i.e. CTQs and CTPs], they are
called Statistical Process Control-SPC and it
becomes the part of QA.
When statistical tools and techniques
applied to finished product [process
output], they are called Statistical
Quality Control-SQC and comes under
QC
Orientation Quality Assurance is Process-oriented Quality Control is Product-oriented
Example Verification/Audit is an example of QA
Validation/Software Testing is an
example of QC

17. HIGHER EFFICIENCY RATE
Having real-time data on the availability of raw materials
and manufacturing delays allows companies to
implement backup plans, such as sourcing materials
from a backup supplier, preventing further delays.
Without real-time data, companies often don’t have time
to initiate plan B, resulting in issues such as out-of-stock
inventory or late shipments to end consumers.

20. KEEPING UP WITH DEMAND
“If consumer sales increase by 5 percent in a given week,
a retailer could end up ordering 7 percent more product
in response to the increase and a feeling that demand will
continue,” according to a report by VISA. “The next link
in the chain, observing what appears to be a 7 percent
increase in demand, then orders a larger increase on his
supplier. Eventually the factory may observe an inflated
20 percent increase in orders.”

21. Known as the bullwhip effect, this phenomenon often
results from delays in communicating supply and
demand changes. Supply chain leaders with access to
real-time, accurate information and integrated data can
better predict demand and readily respond to changing
market conditions to avoid challenges like the bullwhip
effect.

23. SHIPPING OPTIMIZATION
According to Logistics Management’s The State of
Logistics Report, freight transportation costs increased by
7% from 2016 to 2017, while private and dedicated
trucking costs increased by 9.5%. Less-than-truckload
costs rose by 6.6%, and full truckload costs rose by 6.4%.
Due to rising costs, shipping optimization is a priority for
supply chain leaders. Identifying the most efficient
shipping methods for small parcels, large bulk orders and
other shipping scenarios helps companies get orders to
customers faster while minimizing costs.

24. Not only do those cost savings boost the company’s
bottom line, but savings can be passed on to consumers
as well to improve customer satisfaction.

25. Freight Consolidation
Everyone knows that reducing the amount of steps needed
to complete a task is a sure-fire way to save resources. For
shippers this methodology equates to consolidating or
combining shipments to and from your business. Shippers
main expense is paying for items being sent to them from
suppliers, vendors, and manufacturers. If you can work
with them to consolidate those freight shipments inbound,
you can save quite a bit of money. And contrary to popular
belief, working with suppliers to consolidate shipments is
easier than you’d think.

26. The Right Mode for the Right Service
Shippers have more flexibility than ever with selecting a
shipping mode for the movement of freight. By setting up a
shipping plan and optimizing routes, a company can
complete the research needed to determine which mode is
best suited for each shipment. For example, if you have
smaller commodities that can be shipped via parcel mode,
creating a system of reliable carriers and service
commitment levels that meet the needs of your customer –
without breaking the bank, is just as impactful as
consolidating freight. This method works for all modes –
including LTL, FTL, Intermodal, Multimodal, and Parcel.

27. Strengthen Carrier Relationships
If there is a constant theme in business, it’s that volume
cures all. Whether it’s purchasing full truckload of supplies
or working with the same carriers, building positive
relationships within your network is one of those route
optimization best practice. Shippers and carriers who build
solid relationships based on constant or repeat business
help each other by creating shipping rates that are fair for
each party. If your business needs to send shipments on a
weekly basis, set up a weekly shipment contract with a
specific carrier.

28. REDUCED OVERHEAD COSTS
With more accurate demand predictions, companies can
reduce the overhead costs associated with storing slow-
moving inventory by stocking less low-velocity inventory
to make room for higher-velocity, revenue-producing
inventory. Warehouse fulfillment costs contribute
significantly to overhead. Reduce these costs by
optimizing your warehouse layout, adopting the
right automation solutions to improve productivity and
implementing a better inventory management system.

29. Identifying unnecessary spend is another way to achieve
leaner operations. If you’re facing high logistics costs, for
instance, switching to another provider offering the same
service level and quality at a lower cost is a quick win.
Risk mitigation is a strategy to prepare for and lessen the
effects of threats faced by a business. Comparable to risk
reduction, risk mitigation takes steps to reduce the
negative effects of threats and disasters on business
continuity (BC).

30. IMPROVED RISK
MITIGATION
Analyzing big-picture and granular supply chain data can
reveal potential risks, enabling companies to put backup
plans in place to readily respond to unexpected
circumstances. By taking proactive action, rather than
reacting to supply chain disruptions, quality control issues
or other concerns as they arise, companies can avoid
negative impacts. Understanding risks also helps
companies achieve leaner operations. For instance, 87% of
companies believe they could reduce inventory by 22% if
they had a better understanding of risks in their supply
chains.

33. IMPROVED CASH FLOW
The importance and benefits of supply chain
management systems discussed above allow companies to
make smarter decisions, choose the right partners,
accurately predict and respond to market and demand
changes and reduce supply chain disruptions, but that’s
not all: they also improve the company’s bottom line. For
example, working with reliable suppliers not only means
fewer disruptions and more satisfied customers, but it also
improves cash flow by allowing you to invoice (and get
paid for products and services) sooner.

34. Implementing more cost-effective solutions to eliminate
wasteful spend and reducing overhead costs also
contribute to positive cash flow.
Supply chain disruptions have a domino effect, impacting
every juncture throughout the supply chain, but the same
is true for the positives: effective supply chain
management has direct and secondary effects that support
the efficient, seamless flow of information, goods and
services from procurement through final delivery.