Supply Chain Management Financial Supply Chain

Question: Discuss about theSupply Chain Managementfor Financial Supply Chain. Answer: Introduction Supply chain management is the management of good and services that comprises the movement of these raw materials from the initial point to the point of consumption. It is basically the interlinked network where all the raw materials are first acquired then it is converted into the goods which can be usable and then at last it is delivered to the consumers with the help of distribution systems. Supply chain management is a crucial part of any business and it is important for the success of the company and the satisfaction of the customers. This management increases the customer service and reduces the operation costs by decreasing the purchasing and production cost. Supply chain management also helps in improving the financial position as it increases the profit leverage and decreases the fixed assets (Urquhart, 2006). Supply chain management also helps in increasing the cash flow in a business and is the pillar of an organization that helps in managing the issues that an organization is facing and directly or indirectly affecting the corporate strategy. Other importance of supply chain management is it helps in reducing the inventory costs, and helps in maintaining the trust between two partners. It even provides the manufacturing strategy and improves the quality of the products. Most of the successful companies are today relying on supply chain management and through this they are achieving the competitive advantage in the market (Gattorna, 2006). Mainly companies are doing the supply chain management to boost the customer service as this management has a huge impact on the customers as it makes sure that the right product with right quality is delivered on right time. Companies also use supply chain management to improve the bottom Line. Most of the firms value this management as it decreases the usage of large fixed assets like the plants, warehouses and the transport vehicles that are used in the supply chain. Cash flow in a firm also gets reduced because if delivery of products is accelerated then the profits will be high. The objective of the company that uses supply chain management is to ensure the long term benefits and these benefits are enjoyed mostly by the firms that have large inventories and large number of suppliers. Firms that have customers with large purchasing budgets also benefit the most. Basic reason that company uses supply chain management is to save the cost and to coordinate the resources in a best way possible. Supply chain management also reduces the bullwhip effect that occurs through the process integration, better production method and less safety stock in the organization. The basic elements of supply change management that company uses is purchasing, operations, distributions and integration. Main objective of supply chain management is to supply the merchandise that is produced and distributed in the right quantity, to the right location and most importantly at the right time so that system cost can be minimized, customer is satisfied, global competition is gained and further standardization is improved. References Gattorna, J. (2006). Supply Chains are the Business. Supply Chain Management Review. Vol. 10, No. 6, pp. 42-49. Urquhart, H. R. (2006). Managing the Financial Supply Chain. Supply Chain Management Review. Vol. 10, No. 6, pp. 18-25.