There are many technological implementations that can help the overall operation of the business. As an example, the information technology has produced a system known as SCM or supply chain management. This is something that has gained prominence in many companies. Although the system may not be directly related to production and marketing, it could still grow sales and reduce costs.
SCM can reduce costs through improved integration of information streams, better digital workflow and direct connections with online sales. With digital workflow, it is possible to reduce efforts directly related to data entry and information transmission.
EDI or electronic data interchange is a set of IT standards that are essential in the SCM system. It is able to remove inefficiency and employees won’t need to re-enter specific code or a piece of information. This could potentially eliminate the possibility of data entry errors; because each newly information can be cross-referenced with available database and other recently inputted information.
This will ensure that the supply chain can become smoother and more improved. There will be much reduced costs, because managers can have higher visibility on the supply chain.
It may seem unlikely that a system designed for the supply chain can help to boost sales. But SCM can have real effects on our overall sales rate. Potential customers often check our websites to check for the availability of specific items in the company. SCM could provide real-time information about how many items are available in the supply system and where they are located.
It means that potential customers can choose to purchase something, if an item is available and located near their home. Potential customer may “lock” the item; so it can be ensured that they will get the item until they pay for it. The item will be released for purchase by other customers, if the first customer fails to pay for a specific period of time.
SCM can help companies to gain strong pricing leverage compared to the competition. The actual cost of an item can be determined and it is actually possible to reduce prices; because the actual costs have been reduced due to specific factors. As an example, specific items can be available in a location.
It means that the shipping cost will be lower for customers in the surrounding area. It means that companies can provide local deals for customers, because the shipping costs of the item have been reduced. This will result in increased higher sales and this fact can only be identified by the implementation of SCM.
SCM is able to reduce the cost of delivering products from the manufacturing plant to the physical shelves or online websites. Sales can be improved by offering lower prices or deals to customers. Supply chain managers can deal with sudden increases in demands; so they can predict when they should order an item. Suppliers can also be integrated with the SCM system, so they will be able to automatically deliver products in much shorter amount of time.