Now or Never

Having an efficient supply chain is the core to success for any business. However there are various challenges when it comes to management. For a business to turn raw material into finished goods, it needs to collaborate with other suppliers and intermediaries. Although intermediaries enable specialization of the production of a good, business need to keep the number of intermediaries as small as possible to generate efficiency in production and delivery to the consumers, such as the case with direct business models.

Providing choices to consumers is important as customers have different preferences. More variety results in more attraction for customers, and consequently more sells. However, variety comes with a high cost, including rental, inventory and insurance. With an increasing real estate price, a company must balance its inventory and rental cost.

For a company to be profitable, it needs to minimize its costs. The business should obtain a high inventory turnover by pushing out its products, minimizing products depreciation, and increasing cash flow. Another way to decrease cost is to reduce the distribution of profit to intermediate. This can be done by restricting the number of intermediates in the supply chain of a business.

Check out: http://en.wikipedia.org/wiki/Supply_chain

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