So, what’s a supply chain?
In simple terms, a supply chain is the series of steps and activities required for a company to deliver goods and services to a consumer. Think Amazon.
Supply chain management oversees this process. It looks after coordination, management, and strategy, while collecting data, information, resources and materials to deliver the best product and service.
It sounds simple, but managing a supply chain is filled with potential risks. Every supply chain has unique risks and hazards which can harm your workers and impact business productivity.
Why do supply chains need to be managed?
A good supply chain has:
- Lowest cost possible
- Timeliness, and
All things which can be enhanced by having a thorough supply chain management system.
Supply chain management exists to transform complex business activities into strategic capabilities, aligned processes, and strong relationships. This culminates in improved business performance and a seat in the marketplace.
One of the ways to do this is by reducing workplace incidents and injuries.
Safety in supply chains
From entertainment to construction to manufacturing, safety hazards are everywhere—but they can be prevented through thorough risk management processes and procedures.
Your sites and projects will be safer when your workers have greater visibility of current safety practices and procedures. Risk is reduced when you have only the most qualified and trained workers on site.
What’s the benefit?
By effectively managing your supply chain, you can cut excess costs while delivering products to consumers quickly. With seamless and error-free production, products are made and packaged at a faster rate than those produced in dangerous working conditions.
You can also build relationships with a network of contractors and suppliers. When you have an effective supply chain management system in place, you can more easily find the right people for the job.
Is there a difference between supply chain management and logistics management?
They may sound similar, but supply chain management is different to logistics management. Logistics management takes care of the process of integration and maintenance. Supply chain is the coordination and management.
What makes up supply chain management?
There are five basic components of supply chain management.
Plan the resources needed to meet customer demand and deliver a product or service. Your plan should include metrics which indicate if the supply chain is efficient, effective, delivers value to customers, and meets your business goals.
Choose reliable and compliant suppliers to provide the goods and services you need to create your product. Once you have your suppliers, establish processes to monitor and manage relationships.
Have the resources required to accept raw materials, manufacture your product, quality testing, package for shipping, and schedule for delivery.
Coordinate orders, schedule deliveries, invoice customers, and accept payments.
Design a network or process to easily take back defective, excess, or unwanted products.
There’s an often forgotten but equally as important sixth step:
Set up processes to monitor information throughout the supply chain and assure compliance with regulatory requirements. You need processes in all parts of your business: finance, HR, IT, facilities, portfolio management, product design, sales, and quality assurance.
How we can help?
Pegasus, and our parent company Avetta, provides solutions to these challenges with our software. Avetta’s clients have seen a decline in workplace incidents along their supply chain using Avetta—all at a low costs and easy access to supplier information and certifications.
Talk to Pegasus today about managing your supply chain.
A version of this blog post first appeared on the Avetta blog here and has been republished with full permission.