In the current business environment where fixed budgets and even tighter turnarounds have become the norm of the day, effective supply chain management has become a key requirement for any business that wants to remain relevant. Improving the supply chain process makes the business more effective, efficient, and convenient something that makes the whole process potentially less costly. Decision-makers all agree that supply chain management remains the most critical factor in determining if a business will succeed or fail. Making relatively minor adjustments to the supply chain can bring about monumental financial advantages for a business. On the other hand, ignoring such adjustments can lead to catastrophic losses for the business. (Simchi-Levi, Kaminsky, & Simchi-Levi 15)
In the past, businesses enjoyed the privilege of operating without much competition in their area of specialization. However, this has changed and businesses have to contend with increased competition in every area. For businesses like PMU that deal with the supply of books, improving its supply chain process can give it more leverage against its competitors. One way of doing this would be by using proprietary computer software to link the company’s distribution centers to the main office. This would be an effective way of enabling PMU to ship most of its orders within 48 hours after they are ordered. Making just-in-time deliveries would give retailers a high-profit margin that is proportional to the space used for display and inventory.
Another way that the bookstore can do to better its supply chain is by increasing its relationship with the buyers. Instead of using the conventional way of letting the buyers decide when they need to restock, the supplier (PMU) can become more involved in that process. This is achieved through an “offer to inventory management” where the company monitors the customer’s inventory level hence ensuring that the customer has a constant supply of goods. This also gives the company a chance to cut down on stock that is slow-moving hence creating more room for storage of fast-moving books. Doing this would increase its profit and reduce the cost incurred through stocking books that sell at a slow pace.
Another way that PMU can use to make its supply chain process more effective is through the “offer to end-user” process. Instead of waiting for wholesalers to place their orders, the company can go back into the demand chain and look for the end-users of its products. Visiting colleges or other institutions can achieve this objective since they require a high quantity of books. This would enable PMU to generate step changes in the efficiency of its operations. Additionally, PMU can use the fast-spreading e-business market for its books. This would help a great deal since customers would only place orders for a section of books that are relevant to them.
In the face of the fast-changing business environment, companies are left with no option other than to improve their supply chain process if they are to remain in operation. Improving the supply chain allows the company to become more effective, efficient, and makes the buying process more convenient for its customers. This increases the company’s profits and enables it to reduce costs associated with storage and other handling expenses. By cutting down the demand chain and going directly to the customers, companies such as PMU can gain more customers hence increasing their sales. This can also help them in ordering customized books in the future.
Simchi-Levi, David., Kaminsky, Philip., & Simchi-Levi Edith. Managing the Supply Chain. McGraw Hill, 2003, 10-20. Print.