
31 Mar The Changing Landscape of Supply Chain Management
Supply chain management (SCM) is a set of strategic processes and practices that enable businesses to effectively manage the flow of goods and services from suppliers to customers.
The landscape of supply chain management is changing rapidly. These changes are driven by several factors, including:
The rise of e-commerce
E-commerce is the buying and selling of goods and services via computer, tablet or smartphone. It is a growing industry that affects businesses of all sizes, from small startups to global enterprises.
Consumers have grown to demand convenience, availability and speed when shopping. This has led to a revolution in retailing. While many companies have shifted to an online-only model, others have maintained their brick-and-mortar presence.
The growth of e-commerce has a major impact on supply chain management. It allows consumers to compare prices and delivery times before making a purchase. This can help to drive competition and lower supply chain costs.
It also makes it easier for companies to communicate with their suppliers and customers, reducing the need for paperwork. This can also save money on transportation costs, as well as improve the overall profitability of a supply chain.
Moreover, e-commerce can provide real-time information about inventory levels and order status, allowing companies to make more informed decisions about when to produce or order products. This can reduce the risk of stockouts or overstocks.
While e-commerce has a large impact on supply chain management, it can also present some challenges for companies. One of the biggest challenges is ensuring that a company’s e-commerce supply chain is efficient and can deliver the desired product or service to its customers. Origin supply chain solutions include supply chain management and scm software which you might want to consider getting for your business.
This can be difficult to achieve when the competition is so strong, as consumers are often willing to buy from a competitor if they have a better price or faster shipping. Another challenge is to ensure that a company’s e-commerce logistics are flexible enough to adapt to market changes quickly.
E-commerce has become a critical component of the retail industry. In fact, FTI Consulting predicts that the United States e-commerce retail sales will reach $1 trillion by 2023, up from $750 billion in 2016. This is expected to boost the number of consumers who shop online to more than a quarter of the total population.
The commoditization of goods
The commoditization of goods is the process by which products and services become more similar than they are different. This occurs when goods and services differ only in price, and not in other important characteristics such as quality or brand identity.
In many cases, commoditization can be beneficial to consumers by simplifying the decision-making process and reducing the time it takes to find a product. For example, if one navel orange costs a dollar at one store and another only costs fifty cents at the local grocery, the buyer will probably choose the cheaper version.
However, commoditization can also be harmful to companies. When a product loses its distinctive characteristics, it becomes harder to stand out in a crowded market and attract customers. This can lead to lower profit margins and slower growth.
Commoditization can be avoided by providing an array of ancillary enticements that separate the product from its competitors. Some examples include free gifts with purchase, exclusive membership discounts and deals, and ongoing discount programs.
A recurring offer that extends a customer’s service beyond a single purchase can also be effective at delaying commoditization, such as a yearly subscription to a high-end magazine or a premium membership at a swanky hotel. These perks can entice customers who are looking for more value than they can get elsewhere.
When a company produces an innovative new product, it may initially be priced high to attract buyers. Then, as the company’s products are sold in more and more stores and online, a new level of commoditization can occur.
For example, a company that sells a high-end car might jack up prices to attract luxury buyers who want to own the latest model. The company may then lose the luxury buyers to its competitors who offer more enticing deals.
In contrast, a company that sells an inexpensive car might try to attract a wider audience by offering discounts or special offers. These can include holiday-themed sales, promotions, free shipping, flexible payment options, and extended warranties.
In some cases, commoditization can be good for a company’s business, as it allows for more rapid growth. It also opens the market to a wider range of consumers, which can increase the number of customers and their spending power.
The COVID-19 pandemic
The Changing Landscape of Supply Chain Management
Historically, many companies have been tempted to move production and sourcing closer to customers to save costs. However, this strategy has often posed a risk because of the inefficiencies involved in developing and maintaining infrastructure.
The COVID-19 pandemic has highlighted the need for global firms to shift to diversification and redundancy in their supply chains. This is a trend that has long been under way, but has now been elevated to a higher priority due to the disruptions that the pandemic has caused.
As a result of this new focus, a large number of companies are shifting to a more diversified and resilient supply chain network that has the ability to withstand disruptions like those experienced by the COVID-19 pandemic. These strategies are aimed at overcoming the challenges that have been created by the pandemic and also preparing for future crises.
Since the COVID-19 pandemic has been so disruptive, companies have had to take a hard look at their existing logistics and IT systems and find ways to strengthen them. This requires a holistic approach to the supply chain and the use of technology that is designed for this purpose.
For example, companies need to have accurate supplier information that reflects their financial stability and other key data points. This is important because it allows them to identify suppliers who can help them with their specific needs.
Additionally, they need to make sure that their suppliers are secure and reliable before allowing them to be included in their supply chain networks. This is especially important if the company wants to mitigate the risks that may arise from the pandemic.
This has led to an increased focus on securing the best possible vendors for their supply chains and avoiding any unnecessary risks that may arise. The main issues that have been associated with this crisis include lockdowns, transportation restrictions, and raw material shortages.
Despite these challenges, there are still many benefits to a more diversified and resilient supply network. These benefits can include a more efficient and effective manufacturing process, fewer interruptions during transit, better customer service, and less inventory risk. Moreover, a well-designed supply network can reduce costs and increase flexibility by enabling businesses to respond quickly to changes in demand or other unexpected circumstances.
Globalization
Globalization is a process that makes people, businesses, and governments around the world come into closer contact with each other. It is largely driven by technology, international trade, and investment. It has a huge impact on the environment, culture, economic development, political systems, and general well-being of humankind.
The word “globalization” can refer to a number of different things, but the most important is that it refers to the increasing interdependence of people and nations. It is the result of a variety of different factors, such as the internet and major improvements to transportation infrastructures.
This process of integration has made it easier for people to travel across borders and has even helped countries in poorer regions to catch up with the industrialized nations. It has also allowed companies to increase their profits by lowering prices and has increased the demand for certain products.
As a result, the economy has become more interconnected and many people have more opportunities to find jobs. For example, if someone in the United States wants to buy a car, they can choose to get it shipped from China. This will save them money on shipping costs and will allow them to pay a lower price for the product.
But, while the benefits of globalization have been significant for many countries, it has also brought some problems with it as well. For instance, many manufacturing jobs have been moved overseas due to this process of globalization.
Another problem that has arisen is that globalization can lead to higher rates of unemployment. This is especially true for the poorer nations where workers are often paid less than their counterparts in richer countries.
This can cause an eroding of the middle class, as more and more people struggle to make ends meet. It can also lead to a decrease in the standard of living for the average person, as they have to spend more on food and housing.
As the effects of globalization continue to grow, it will be important for companies to learn how to adapt to these changes. They will need to understand how to improve their processes, streamline operations, and find new ways to reduce their costs. They will need to know how to deal with the influx of different types of goods, materials, and people in their supply chains. They will need to be prepared for the possibility of disruption from events such as natural disasters or wars.