What is supply chain management?

As freight forwarders, understanding and knowing effective supply chain management is an integral part of our work, and how we help our clients maximise their results. 

What is supply chain management? 

Supply chain management (SCM), involves handling the entire production flow of a good or service to maximise: 

• Quality
• Delivery 
• Customer experience

And, importantly, profitability. 

This includes all processes that transform raw materials into final products, actively streamlining businesses’ supply-side activities to maximise customer value and gain a competitive advantage in the marketplace. 

What it attempts to do is control or link the product, shipment and distribution of a product. By managing the supply chain, companies can cut excess costs and deliver products to the consumer faster. This is done by keeping tighter control of internal inventories, internal production, distribution, sales, and the inventories of company vendors. 

What are the components of supply chain management? 

1. Planning
2. Sourcing
3. Manufacturing
4. Delivery and Logistics
5. Returning

Why is supply chain management important? 

It’s simple really – effective supply chain management reduces production costs by ensuring timely shipments, predicting stock shortages before they occur, and that customers are provided with the right number of products at the right location, and the right time. 

How is COVID affecting the supply chain? 

The pandemic has affected the supply chain from start to finish. It all began with the various national lockdowns at the start of the pandemic, which slowed or even stopped the flow of raw materials and finished goods. And like all good (or in this case, not so good) domino effects, these delays trickled down to every other aspect of the supply chain, which in turn created new and different problems. 

This was heightened by a ‘demand risk’ to supply chains – think panic buying of toilet paper – which involved a sudden surge in demand that caught manufacturers and retailers by surprise. 

Today, the supply chain is largely affected by distribution issues. which you can read all about in our other blog posts here. 

And this is where the expertise of freight forwarders comes in! 

How does freight forwarding fit into the supply chain? 

A freight forwarder (like us at McHugh & Eastwood), is a multifunction agent, who undertakes and handles the movement of goods from Point A to Point B on behalf of the owner of the goods. 

A freight forwarder is an integral part of  supply chain management, as they act as an intermediary between clients and transportation services, liaising with various carriers to negotiate and decide the most economical, reliable and fastest route. 

In other words, good freight forwarders make the whole process of supply chain management smoother from start to finish, ensuring that your goods will arrive at the correct destination on time, and save you money in the process. 

There are six key stages of freight forwarding:

Export haulage 

The transfer of goods from its original source to the freight forwarder’s warehouse, airport or seaport.

Export customs clearance

The goods receive clearance to leave its country of origin.

International Freight 

Moving from one country to another country via Air, Ocean , Road or Rail.

Import customs clearance

The customs paperwork for your cargo will be checked by the authorities.

Import Haulage

The transfer of cargo from the Air or Sea Port warehouse to its final destination.

What makes freight forwarding effective? 

At McHugh & Eastwood, we set our freight forwarding services apart by offering the very best in product customisation, real-time global tracking, and elite response times. 

We are constantly updating and upgrading our internal processes to reflect the global market, especially in today’s uncertain and changing environment.  

Looking for freight forwarders to simplify your supply chain management? 

Contact McHugh & Eastwood today