Transport and logistics are key components in supply chain management. Transport refers to the movement of goods from one place to another. Logistics on the other hand involves the management of the inward and outward transportation of goods from the manufacturer to the end-user. Therefore, these components deal with getting products and services from one location to another. Despite the concepts being interchangeable, logistics deals more with the integration of storage, transportation, cataloging, handling, and packing goods. Supply chain management is the entire umbrella that involves the handling of the entire production and flow of goods and services. This helps to maximize the quality, delivery, consumer experience, and profitability.
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WAYS TO MITIGATE RISKS IN TRANSPORT AND LOGISTICS.
Transport and logistics come with various risks to the products on transit. Therefore there are ways in which people can mitigate these risks as follows. First, suppliers can build factories or distribution centers close to the major supplier. This, therefore, helps to reduce the risk of lost shipments which could lead to a shutdown in production. It also allows for quick and rapid delivery with minimum risk of delay. Another method is whereby, suppliers who are not close to the main supplier should have backup routes for transportation of the products. This includes options such as reserve vehicles or shipping companies on retainer which the supplier can use in case their main delivery truck encounters a problem while on transit. These mitigation measures require knowledge in supply chain management.
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THE IMPORTANCE OF SUPPLY CHAIN MANAGEMENT IN BUSINESSES.
Supply chain management is important in businesses since it reduces operational costs. This is because it helps to decrease the purchasing, production and total supply cost therefore the business incurs minimal costs in terms of production and delivery of goods and services. Secondly, it helps to boost customer service through transport and logistics. This is since it ensured correct delivery of products. This involves the time, location, and quantity of products this ensures consumer loyalty. Lastly, it improves the financial position of a company. This is because it increases profit leverage, decreases fixed assets, and increases cash flow within the business. This brings about the growth and success of the business.
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