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Incorporating Supply Chain Management Tools
By Sharanya

How to Gain Higher Net Margins by Incorporating Supply Chain Management Tools

May 6, 2022

Every major and minor text available at the moment highlights the new challenges and risks associated with the globalizing world economy, thus giving a global perspective on business operations more relevance. With the evolution of globalization, corporate activities are expected to cope with the influence along with the opportunities that arise from it. This is where supply chain automation platforms come to the fore, making the transition smoother.

The advantages of being able to make more products go well beyond lowering the per-item sales costs. Along with producing better economies of scale, you should create strategic benefits to maintain the market share and keep competition at bay.

Sales automation software refers to the technology that has been specifically designed for organizations to streamline sales by automating the workflows. It is meant to facilitate sale processes across sales teams, partners, end customers, and distribution channels so that the concerned salespeople can turn their focus towards closing deals with high-value prospects as they maintain their relationship with existing customers.

By integrating sales automation software, sales professionals can save time by automating administrative acts like managing calendars, processing opportunities, and updating contact information without manually updating them. Some of the most important benefits of integrating such a platform company-wide include:

  • Improved profitability & costs reduction
  • Enhanced alignment & transparency between departments
  • Encouraging a timely business decision-making process based on real-time updated information
  • Optimizing installed production capacity
  • Improved inventory management, thereby optimizing the working capital
  • Increase in on-time and in-full delivery
  • Increased accuracy in sales & budgeting processes
  • Streamlined end-to-end supply chain processes

In order to realize the actual savings, organizations have to calculate the effect of implementing changes in the supply chain operations on the following – supply chain operations on the working capital, the revenue of the organization, operational costs, and service provision. Once this is sorted, companies will be able to determine the extent to which profitability can be increased through supply chain optimization.

Determining, understanding, and applying EBITDA (Earnings Before Interest, Tax, §Depreciation, Amortization) plays a crucial role in uncovering the value of a business. As a measure of a company’s financial performance, EBITDA acts as an alternative to revenue, net income, and earnings.

The Total Supply Chain Cost (SCC) includes the manufacturing cost + administration cost + warehouse cost + capital cost + distribution cost + installation cost. You should strive to keep the total SCC as low as possible, especially lower than the net sales. If the net sales decrease, the total SCC would also decrease and still, if the net sales increase, the total SCC should also decrease. EBITDA gives a fair idea of the company’s value and demonstrates its worth to stakeholders who want to do business with the company.

Active management of supply chain activities has turned to become an integral part of every organization. It not only maximizes customer value to help companies achieve a competitive advantage but also helps synchronize the demand and supply balance. Integrating a supply chain tool would help you predict supply chain risks so that you can put your whole focus on mitigating them, thereby significantly affecting the EBITDA.

A supply chain automation platform like Timber Exchange has an extremely low capital requirement vs what you would have incurred if you invested in a new production plant. As a plug-and-play easy-to-use platform, you can implement this within a few minutes unlike a whole production plant, and start using it almost immediately. This would ensure that your supply chain is looked after and you have more than enough time to take care of your business activities.

How Timber Exchange Helped ELE Improve Operational Efficiency

ELE, an acronym for Ewald Larsson Eftertradare Sawmill, is a specialist sawmill in Sweden that currently has forest holdings of almost 11,300 hectares and has active forestry operations on around 9,300 hectares of them. Initially, ELE faced several hurdles while expanding its operations in the form of bureaucracy, information deficit, language barriers, and access to the new market. They also had no visibility on their partners in continents like Asia and Africa. The COVID-19 situation only restricted physical movement and limited opportunities for ELE.

This is when they integrated the Timber Exchange global supply chain automation platform into their regular functionality. As a technology platform that facilitates timber trade and operates a comprehensive digital toolset and specialized marketplace for importers, sawmills, and forwarders, Timber Exchange has been created by industry professionals with global experience in the field.

By integrating the Timber Exchange platform, ELE managed to overcome all the hurdles that they were facing – starting from negotiating the deal with the customers identified using the CRM module till the delivery. The 100+ smart tools available on the platform, segregated under various categories, provides enough options to manage every aspect of their supply chain from one place. Given the simple user interface, ELE could reach global customers who they didn’t even know existed in a few days of onboarding, making their sawmill more profitable.

The Timber Exchange supply chain calendar provides real-time information on freight movement that includes – the goods being ready in the mill, when they would be delivered to the port, arrival and sailing dates of the vessel, and shipment dates. Monitoring such activities gave ELE a detailed understanding of their supply chain. Now ELE can get visibility into their operations, thereby helping them outline the active deals, actual volume, value of deals, deals under negotiation, and demand & supply stage positions under one umbrella.

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