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An effective supply chain management system is crucial for any business that must deliver numerous products to multiple locations. No matter the size, most companies can improve performance and eliminate inefficiency with the proper system.
What exactly is supply chain management? In short, it is a way of making certain that customers and store owners receive their orders quickly and efficiently. The system was first used on the Greek battlefield to ensure that soldiers always had weapons and access to medical treatment. In fact, many historians believe that logistics played an important role in most Greek battles. It gave them a competitive advantage over their adversaries which often resulted in victory.
Today, logistics management is more commonly used in business than in battle. Professional logisticians analyze every aspect of the supply chain from production to storage to shipping. Probably the most important part of their job is to manage the supply chain and to address inefficiencies.
Ideally, an effective fulfillment system will run like a well-oiled machine. It will not only fulfill its primary requirement, which is to deliver goods and services to customers, but it will cut costs and ensure that inventories remain at the appropriate levels. That way, a company will never run out of a popular product. When they do, it often means that the logistics team made an error.
When it comes to storage, most companies have access to a warehouse. But transportation is a more difficult question. There are several viable options. Let us take a moment to review them all.
First, a business can become a transport company by purchasing their own vehicles. This is an expensive option that is often only available to larger companies. Though the initial investment will undoubtedly be substantial, the company may end up saving money over time.
The second transportation option is renting or leasing. This is a popular choice for mid-size companies who cannot afford to purchase an entire fleet of trucks. Since they are durable and always in demand, leasing vehicles and purchasing them at a discount when the lease expires may be an attractive option.
The third and final option a company has with regard to transportation is to hire a distributor or a transport company. These companies provide a vital service for businesses that cannot afford the previous options. There is also ample evidence to suggest that using a transport company is much cheaper than actually buying or leasing, especially in the short term.