Technical Aspects of the Supply Chain Process in a Business Venture

Supply chain management, or SCM, is a process that integrates procurement, the movement of raw materials and finished goods, as well as delivery of the final products in a streamlined and efficient manner.

Supply chain management is considered as one of the most important aspects of an organization, with research showing that almost 79% of all companies worldwide achieving higher growth than their peers by implementing highly efficient supply chain.

Effect of supply chain process or management on business output

  • Studies show that an efficient transportation management system can lower shipping costs by up to 8%.
  • A 25% gain in overall productivity for organizations implementing an integrated order processing system instead of manual storekeeping.
  • Improved usage of raw materials and warehousing space by 15% to 30%.
  • Businesses with an optimized supply chain process are likely to enjoy almost 3x faster cash-to-cash cycles and lower cost for overall process maintenance.

Aspects of an effective supply chain management

The optimized flow of goods and information requires integrating management pointers to almost every sector of a business, as well as implementing several crucial technical aspects that allow for faster movement of products.

Let’s take a look at some of the crucial factors of SCM that every businessman should know:

  1. Information – It is essential for every business to stay well-informed of all the crucial information regarding various factors of its production. The world today witnesses a constant change in customer demand, and businesses need to stay ahead of market trends to successfully operate and grow. Understanding ongoing market trends and modifying existing supply chain networks to match those changes is crucial, and businesses need to harness all the information regarding these factors before optimizing their supply chain process.
  2. Planning – The second most essential aspect of creating a supply chain management process for a business venture is planning. An optimized network should consider the latest market research along with the organization’s resources, available infrastructure, working capital, manufacturing capacity, etc. to create an optimized supply chain process. It can help boost a slow-moving business, as well as introduce several long-term benefits.

Another important benefit of proper planning is that it helps identify both the infrastructural and financial deficit specific to an organization. Businesses can then vitalize these sections with supply chain finance.

  1. Suppliers – Suppliers play an important role in supply chain management systems. The timely delivery of raw materials is essential to maintain both the quantity and quality of goods. Any delay can lead to overshooting the operational budget and damaging an organization’s market reputation. Rates applicable to a supplier are also necessary to maintain cost-effective finished goods.
  2. Inventory – A well-kept and thoroughly maintained inventory is essential for an efficient supply chain management system. A detailed record of available raw materials, ready list of items, and other necessary components required for manufacturing or service will help a business understand its current as well as future standing. Inventory management is an important part of supply chain management, and it can help an organization increase its total manufacturing capacity, lower the costs associated with warehousing, prevent overstocking, etc. These translate into a lower cost of production, contributing to a higher profit margin.


  1. Location – The physical location of a production unit plays a critical role in its supply chain management. Location and infrastructure affect an organization’s supply and delivery chain. If a production unit is not well connected with modes of transportation, the business is likely to suffer from slower inflow and outflow of raw materials and finished goods. The scarcity of skilled workers is another crucial aspect; migrating workers require infrastructure in the form of residential units, which can incur additional cost on a company’s budget. These factors affect the key variables as well as the overall funds associated with the supply chain process.

The above mentioned technical aspects are some of the most important parts of supply chain management in a business venture. Streamlining all these can help an organization establish an efficient supply management system with ease.

The availability of supply chain finance has allowed companies across the nation to implement these necessary changes to streamline their overall production.

Organizations can avail to business loans offered by financiers such as Bajaj Finserv at affordable interest rates and multiple repayment tenor options to help businesses better manage their finances.

Demand and supply are two of the most essential aspects of an organization. Businesses that have a robust and well-deliberated supply chain management are likely to enjoy a streamlined process for both, significantly improving the chances of successful growth amid obvious variations to the operational landscape.

Focusing on all these aspects will help create a flawless system for the benefit of that organization.


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