Important role of Supply chain management in the success of all Multinational Enterprise

Supply chain management plays an important role in the success of all Multinational Enterprise. It comes along with certain challenges which also have to be overcome. However before going in any detail it is essential to understand what supply chain management is. Supply chain management is simply the system undertaken by companies to make sure that their materials, information and finances moving from the supplier and then moving to the manufacturer and then to other intermediaries  which is the wholesaler to finally the retailer and then finally to the consumer with utmost efficiency and cost effectively. There are many steps involved that are involved in transforming raw materials into the final finished product. A typical chain comprises of certain stages which are: plan, develop, make, deliver and return.

The first stage in supply chain is known as a plan which is important because only a well planned strategy will be able to achieve and produce a healthy supply chain. The developing part involves creating a healthy relationship with suppliers of raw materials. Then comes the stage which is of making the product where it is put to test and manufactured, tested, packaged and ready to be delivered which brings to the fourth stage which is delivering. The last and final stage is return where customers return their defective products (supply chain management (SCM)).

Another approach or a way to understand the supply chain management is when a company divides all management activities into three groups that are namely strategic, tactical and operational. In this case strategic group is responsible for handling relations with customers as well as the suppliers and integrating information technology. The role of tactical group is to understand its competitors and make decisions in respect to production and delivery. And finally the operational department is responsible for the day to day management of supply chain along with the production schedules.

However it all comes down to one purpose of an effective chain supply which is to reduce inventory or keep appropriate inventory so there is no waste and the stock is efficiently used. 

The Supply Chain management flow in the modern years has changed a little and now consists of 3 flows that are the product, information and the finance flow. The product flow consists of movement of goods produced starting from the supplier ending with the customer along with catering to all of the customer needs and returns and inquiries regarding the service. The information flow is involved in sending orders and updating and informing the status of delivery. Last but not at all the least is the financial flow which contains all the payments timetable and schedules. It also includes credit terms and most importantly it is the title or name of the ownership and its arrangements.

 

In today’s highly competitive business environment, supply chain management plays a significant role in multinational organizations because supply chain management gives a superior edge to the organization over their competitors. Through supply chain management organizations around the globe can improve their export specialization, employment options, prices, wages, and productivity and also improve their terms of trade. 

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