Supply chain is the backbone of every Consumer good delivering business. The supply chain is the main process that makes a business stands high as a brand in the market. Maintaining a proper supply chain for a business is a tedious task today.
Supply Chain Management ( SCM )
Supply Chain Management is a complete process of changing the raw materials into goods and delivering them to the end-user. It is nothing but a process of managing the flow of goods/ services starting from the supply of raw materials to the manufacturer until the delivery of the final good to the consumer. It involves material flow, information flow as well as financial capital flow.
SCM involves the supply and storage of raw materials, production of goods, transporting and delivering it to the end-user. Supply Chain is a network of individuals, resources, organizations, processes, technologies connected together to produce a product/service.
RISKS AND DIFFICULTIES IN THE SCM INDUSTRY
Now, we have gained a bit of knowledge about SCM, but none of us don’t know about how SCM industry is suffering to deliver goods & products to the customer on right time with right quantity. Right?
In between the process of distributing a good to the customer there involves a lot of processes, and there will be a lot of inter-mediate people will handle the process. So there is less guarantee for fraudulence not to occur and big chance for delivering the wrong product with varying quantity to occur.
There will be at least 7 types of people involves during the process of SCM.
1.Supplier - A company or an individual who delivers the raw material
2.Manufacturer - A company or a group of people who manufactures a product with the help of purchased raw material
3.Distributors - A company, who distributes the product to the retailers
4.Exporters- People who ship the product across various countries
5.Retailers - A Group of people who sells the product at wholesale to the shoppers
6.Shoppers - The people who purchase the product from retailers and sells it to the customers
7.Customer - The person who buys the product.
As discussed SCM industry is facing a lot of Risks from supplier to customer.
We can split up the risks of SCM into two
1.Internal risk- Risk that can occur inside the chain which you can control
2.External risk - Risk that occurs outside of the SCM and which will not be in your control.
INTERNAL RISK IN SCM
Manufacturing Risks - Disruption that occurs during the process of Manufacturing a product.
Business risks - Changes that occur in data management, reporting section and the interaction between suppliers & customers.
Plan & Control Risks - When we made a poor assessment which will lead to ineffective management of goods and its distribution.
Risk of contingency - Failing to place contingency possibilities and extracting alternative solutions to prevent it.
Cost control and Quality Risks - As the value of raw material and its tax rate is getting change often we are uncertain about controlling the cost of production.
EXTERNAL RISK IN SCM
Demand Risks - This raises from the customer's end, we can’t predict it.
Supply Risks - interruptions that happens between the distribution flow of the product
Fraudulent Risks - Risks that are leading to delivering wrong products
Market Risks - Market is often changing with a product, so when there is a sudden change in the market value of a product, it will affect the same category goods which are under production.
5.Transportation Risks - This involves the supplier/distributors financial risks, and their management stability.
SOLUTION FOR SCM RISKS
From the beginning, there exist a lot of solution arising to fix the growing risks in SCM. But, none of them have completely fulfilled with proper results. And now experts are optimistic about the growing technology, which is known as ”blockchain”.
Let’s check How can a blockchain be used in SCM ?.
Blockchain in SCM ( Supply Chain Management )
Blockchain with IoT's in the supply chain can make SCM process as easier. Just using the micro IoT's chip to monitor the movement of products and use of blockchain to store the tracking records can provide proper supply chain management. This could also increase product usage and demand.
Originally Published at : Blockchain In SCM