Importance of Supply Chain Management to a Company

Supply chain management implies all the activities associated with procuring an organization’s goals of reducing costs, improving efficiency and satisfying consumer demands. Organizations need to devise supply chain strategies to achieve long and short-term procurement goals. These goals should be in collaboration with corporate strategies of the organization. The SCM (Supply Chain Management) has a direct effect on organizational performance. It is estimated, from a cost perspective, that most companies with extended global supply chain management have a whole lot of costs tied in the supply chains. The increased complexity of global supply chain management, widespread markets and omni channel distribution, SCM supply chain management is essential. It is an integral part of businesses and is essential to customer satisfaction and company success. It is important in many ways,

  • Boost Customer Service

Customers expect the product to be available at the right location and to be delivered on time. The supply chain of an organization ensures delivery of the right product to guarantee customer satisfaction. They also need to keep a check on after sale customer service support to be serviced quickly. It builds customer loyalty.

  • Reduce Operating Costs

Many retailers depend on supply chains to deliver products to reduce their inventory costs. Moreover, manufacturers are also dependent on SCM supply chain management to avoid material shortages that would shutdown production. Also, both retailers and manufacturers depend on supply chains to meet consumer goals with reduced operating costs. 

  • Improved Financial Position

The global supply chain management helps firms increase their profits because they help control and reduce the operating costs. It decreases the use of fixed assets like large plants, warehouses and transportation of the vehicles in the supply chain. The SCM supply chain management’s one of the most important roles is that it increases the product flow to customers. 

  • Improve Quality of Life

Societies with highly developed supply chain management, like modern highways, rail transport, air connectivity and modern ports, tend to exchange business at a low cost. Therefore, consumers can buy and afford more products with their income which in turn raises their standard and improves the quality of life. This results in economic growth. In fact, most poor nations either have no or very poorly developed supply chain networks.

  • Job Creation

Supply chain management generates many job opportunities in the field. The activities including transportation, inventory management, warehousing, packaging and logistics information need some good supply chain and logistics managers. The supply chain professionals are however in key positions to develop sustainable processes ensuring smooth supply chain activities.


Organizations need flexible supply chains to capitalize on opportunities related to rapidly changing customer demands. We hope this article will help you understand and provide valuable resources to begin your career in SCM, supply chain management. IIM Udaipur’s one year MBA in Supply Chain Management Programs is dedicated to provide a solid foundation in management fundamentals and intensive specialization in Global Supply Chain Management by connecting, educating and developing the management professionals throughout their careers. Composed of some of the most respected professionals in the industry, the supply chain management programs demands a high degree of academic rigour and focuses on various aspects of logistics and supply chain management. The program content also includes live projects, company interactions, thought leadership, community and training programs that can help advance your SCM supply chain management career.

Leave a Reply

Your email address will not be published. Required fields are marked *