Every retailer depends on selling items from their inventory for its revenue. If a customer wants a particular item that isn’t in the inventory, the retailer loses a sale. When inventory items remain in the inventory too long, the company loses money that could be used for other purposes. These are significant events in the life of a business because they directly affect cash flow.
Although these events are obviously simple, they occur at the end of this process. The supply chain covers every inventory item and the steps that are required to place that item into the hands of the customer. The item may be produced in Europe and transported to the retail outlets in the United States. Planning the route, modes of transportation, storage in warehouses, and placing the item in the inventory at the local retailer can be costly.
Significant savings may be found by doing an analysis in this area. The analysis would include the manufacture, vendors, warehouses, transportation, and various service providers who handle the items in transit. Problem areas could be recognized and eliminated. The objective is to plan each step and time deliveries so that inventories and costs are kept at a minimum. Supply Chain Advisors
Since supply chain analysis has a direct effect on profits, management should consider periodic evaluations. In addition, the company should consider consulting in this area even if the company does its own analysis. Outside consultants would provide a fresh look and could discover ways to improve the supply chain.
One of the most significant considerations of the supply chain is the personal relationships that the agents establish with the vendors. Regardless the quality of the product, poor relationships with vendors can be costly. Every effort should be made to maintain the best possible relationship with those who are supplying your inventories. If a relationship becomes strained, the company representative should do his or her best to mend it. If that is not possible, the representative should be replaced.
Considering the various complications of supply chain management, companies and retailers who depend on worldwide suppliers, should consider outsourcing their work to supply chain consulting firms. Consultants are experienced in working with supply chains. Many have representatives in foreign countries and maintain personal relationships with manufacturers and vendors. They work with different computer models and software that makes it possible for them to find the shortest routes at the least price. They are invaluable assets.