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The role of supply chain management in enterprises

Samsung's failure of the Galaxy Note 7 product due to supply chain management problems, which is a mass fire incident in the years 2016-2017 consumed a lot of paper and ink in public opinion, causing Samsung to suffer the consequences heavily.

Samsung has cost up to about 5 billion USD to recall all Galaxy Note 7 products and deal with the related consequences. The stock price fell for a long time, and it took a long time for them to gradually regain the trust of customers.

role of supply chain
Supply Chain Mistakes brought heavy failure to Samsung in 2016 - 2017​

Most professional reviews say that the reason from supply chain management problems. The Korean "tech giant" made a big mistake in supplier management and quality control of input materials (poor quality battery supplies).

Looking at Samsung's lesson, we can see the role of supply chain management. So what is supply chain management? And how depends the success - failure of a business through effective supply chain management? Find out in this article together Viindoo.

>>>> See More: Supply chain management software

The role of supply chain management for businesses

A supply chain is not limited but may include the following factor:

  • Organization: Supplier, Manufacturer, Forwarder, Distributor, Retailer, etc.
  • Activities: Product research and development, supply planning and strategy/production planning, sourcing and procurement, production, inventory management, transportation & logistics, management finance, sales, marketing, and customer service, etc.
  • Information system: management software, Database, information technology system, etc.
  • Resources: human resources, capital, assets, etc. 

Because of the comprehensive universality of a business, Supply Chain is increasingly considered the soul of every business model, big or small, simple or complex, whether the product is a product physical or service.

From the definition of Supply Chain Management, we can see the two most important goals that a Supply Chain aims at improving customer experience and saving costs. These are also two factors that directly affect the profitability of businesses.

Therefore, market competition is no longer a battle between individuals or individual businesses. Now, it is a battle between Supply Chains, competing in quality, quantity, and speed to attract as many customers and maximize revenue.

Winning goes to organizations that can better structure, coordinate, and manage relationships with their partners, resources, and customers.

>>>> See More: What is supply chain management?

Amazon - An example of successful configuration for effective supply chain management

A good example of The importance of supply chain management which built an effective and successful supply chain must be mentioned Amazon.

It is no coincidence that the concept of the "Amazon Effect" was formed and became familiar to retail businesses in particular and supply chain managers in general when it comes to the impacts of the digital marketplace on traditional business models.

The most impressive thing that Amazon leaves in the hearts of their customers is the breakthrough speed of order response and delivery, 24/7 response.

However, behind a customer's purchase click is a huge machine: a mobile app platform with more than 156 million users (Statista, 2019), more than 4000 products sold every minute (Amazon, 2019), more than 2.5 million sellers (Marketplacepulse, 2019) and more than 800 warehouses with a total area of ​​​​20 million m2 around the world.

The importance of supply chain managementAmazon Supply Chain - Every Retailer's Dream​

To ensure the speed factor, Amazon has developed a supply chain management system with the most modern technologies:

  • Automated warehouse system with nearly 2 million Robots in 2020
  • Amazon Prime Air system - a drone delivery service built by Amazon itself to serve air freight, ensuring customers receive goods within 30 minutes
  • Applying Machine Learning, IoTs, and many other modern technologies in supply chain management and operation

Amazon is likened to a pioneer, leading the trend, thereby becoming an ideal model that every retailer in the world dreams of achieving.

However, starting to realize the importance of Supply Chain Management and changing my mindset to create a perfect supply chain like Amazon is a long way.

If you are still in the early stages of building a supply chain for your business, start with the simplest things.

role of Supply chain
How to Build a Supply Chain 

Currently, many managers have chosen to use ERP software as a technology platform to manage resources and build supply chains.

Our Viindoo software is one of the preferred technology platforms because of its ability to integrate unlimitedly with all enterprise resource management applications in general and supply chain management in particular; flexible customization for all types of businesses; Simple and user-friendly interface and usage. You can experience it right away by signing up for a FREE trial account on our website.

role of Supply chain

Viindoo SCM software helps businesses optimize the comprehensive supply chain management process

In the above article, Viindoo has compiled information about The role of Supply chain in the enterprise. Hopefully, this information will be useful to readers and help businesses have an overview of the supply chain. If you want to learn or consult in more detail about supply chain management solutions, please contact viindoo!

The role of supply chain management in enterprises
Jennie Pham December 25, 2020

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