Supply Chain Process: Meaning and Role in Business Development & Growth

The supply chain process in a manufacturing firm begins with the acquisition of raw materials and ends with the delivery of the finished product to the end-user.

What is the supply chain?

A series of steps that an organization incorporates in their business module to deliver a service or product to the customer is called a supply chain.

Such steps consist of the following –

  1. Receiving raw materials from a supplier.
  2. The transformation of these materials into finished goods.
  3. Delivery of products to the buyer.

The producers of these raw materials, retailers and distributors, warehouse management personnel, transportation labor, etc. are all included in the supply chain of a company.

So, a supply chain process involves all the various functions that are responsible to meet a buyer’s request after receiving an order. Every organization employs a supply chain management system that optimizes each section of its supply chain.

Supply Chain Process



In order to streamline the overall workflow and generate substantial revenue, implementing an efficient supply chain management system is one of the important requisites of every company. Hence, if you are learning how to set up your own trading business, make sure to gather knowledge about the importance of the supply chain process and management system.

Importance of Supply Chain in Business Development

An efficient supply chain management system is the foundation of every organization as it affects the business development and growth in various ways, which are –

Increase in Business Profits Over Time

An optimized supply chain helps in the regulation of expenses in each segment of product management. So, such a management system helps in saving a substantial amount of funds over time.

For example, if a company is able to reduce their transportation costs due to an efficient supply chain, it can lead to higher revenue or lower cost price of the good, which would drastically improve the overall working capital.

Improvement in the Overall Cash Flow

Organizations that have incorporated a well-structured supply chain process can enhance the overall speed at which the manufacturing unit functions. This helps companies to deliver finished products to their buyers at a faster rate, which has a positive impact on the cash flow of the company.

Reduction in the Purchase and Production Cost

Most distributors rely heavily on their supply chain to deliver products quickly to the retailer in order to avoid substantial inventory costs. Moreover, when an issue develops in the manufacturing process that has caused the whole production to shut down, a well-structured supply chain management system helps to identify the root cause of the said problem easily. This helps to save a significant amount of time and capital and thereby reduce the overall purchase and production cost.

Enhancement in Customer Service

With the help of an efficient supply chain process, an organization is able to meet their targets easily; this, in turn, enhances customer satisfaction.

With the rise in modern technology, effective supply chain management has become a crucial element of business development and growth of a company. Organizations can opt for supply chain finance, vendor finance, channel finance, etc. to boost their existing infrastructure.

As a business owner, if you require funds to improve your management systems, you can avail small business loans. Such a loan will also help you to purchase raw materials of better quality and industrial equipment to speed up the manufacturing process.

Such loans are offered by financing companies like Bajaj Finserv against minimal eligibility criteria and documents.

The company also brings pre-approved offers that help in quick application and approval of financing. Such offers are also available to numerous other financial products such as personal loans, business loans, etc. From the above discussion, you can understand the role of supply chain management in the growth and development of small businesses. It is essential to optimize it at every stage to reduce the production cycle.