Supply chain management is known as the process of production and logistics of a company, which must take place from the beginning of procurement of raw materials in order to create products and the final delivery of such products to their distribution centers and ultimately their points of sale.
The practices of SCM are not only benefited by the reduction of spending, but also by incrementing profitability in investments, commercial growth and reducing the overall cost of doing business. Businesses faced with overruns, due to bad supply chain management have a higher propensity to being affected by economic crises; therefore the difference between a struggling company and a successful one can usually be seen in an adequate and representative use and upkeep of their supply chain from beginning to end.
There are many examples of prosperous companies that have correctly developed the supply change management concept and that enforce efficient practices. These are some examples.
The Coca-Cola Company.
Main makers, marketers and distributors of drink concentrates and non-alcoholic syrups. The main office is located in Atlanta, GA but their products are distributed to virtually every country in the world. Their preparation, distribution and transportation logistics are in line with a segmentation strategy for their customers when it comes to the size and presentation of their products. Aside from having an extremely successful supply chain, Coca-Cola participates in sponsorships, partnerships, and alliances; thus creating a great management and marketing of their products.
The main toothpaste brand made by Colgate-Palmolive, dedicated to producing, distributing and selling oral hygiene and home cleaning products since the last part of the 19th century. Colgate keeps present all aspects of product diversity, effectiveness, optimization and customer support and it uses an effective distribution channel that encompasses all aspects of care and maintenance. Their products are sold in many venues such as pharmacies, supermarkets, convenience stores and small wholesalers, thus creating an excellent impact within their distribution channels and management.
7-Eleven is an international chain of convenience stores, based out of Dallas, Texas. The currently have around 58.308 in 16 different countries, most of them franchises. They are mainly focused on selling basic food items, medicine and toiletries and magazines, but this all depends on their host country. Their main stores are located throughout the United States and Asia. They supply a huge variety of customer needs 24 hours a day in most locations. Their reach, capacity and management have made 7-Eleven one of the biggest and most productive companies in the world.
Zara is one of the main clothing and accessory retailers internationally based in Spain. They are mainly focused on new, trendy and cutting edge fashion for men and women alike. Currently it operates in 88 different markets worldwide, their main distributors are in Madrid and Zaragoza. Zara is known for its energy saving efforts and techniques, as well as their minimization and efficient waste management. This commitment with the environment is paramount within their operations across all plants and departments and has helped create a collective conservation consciousness among members of the staff. In their fabrics, they used environmentally friendly fabrics like organic cotton amongst others. Their textile production comes from Spain, the Far East, India and Morocco. Biodiesel fuel is used to transport their products, according to their environmental policies. The have a great concern for animal treatment and under no circumstances, use animal products that come from animals that were not treated ethically or sacrificed for the sole purpose of commercializing their leather, skin, horns, feathers, etc. While other retailers use third-party production, Zara produces about 60% of the fabrics they use and use cutting-edge technology to cut and measure the handling of fabric so this is done in a precise and efficient manner, thus reducing waste overall.
Amazon is a US electronic commerce and cloud computing company. Their headquarters are based in Seattle, Washington and they are the largest internet-based retailer in the United States. Amazon was one of the first companies that started selling book online. Currently their range of products doesn’t stop there; they also sell music, videogames, shoes, clothing, luggage and many other accessories. Amazon offers about everything you can think of and their variety in offers and products along with their customer driven shopping and recommendations is a hit with customers. One of the reasons why Amazon can have such a wide spectrum of products is the fact that they are not limited by physical spaces, since they don’t have actual stores. Their supply chain goes from the lowest levels of inventory, through the logistics of the order itself all they way up to an outstanding distribution chain of their products in an international scale. Amazon can currently ship close to 10 million different products. This diversity gives it an edge against competitors and makes it a perfect example of what efficient supply chain management can accomplish.