How Does Effective Supply Chain Management Relate to Competitive Advantage?


Supply chain management is the process of procuring the raw materials your company needs to create a product and then distributing those finished products to your customers, according to the CIO website. When you find ways to make your supply chain more efficient, you create competitive advantages for yourself. Understanding those competitive advantages will justify the investment of time and resources into supply chain management.

First to Market

An efficient supply chain means that your company has the upper hand in getting your products first to market. When you beat the competition to market with functional and ground-breaking products, then your company becomes known as an industry leader. Being recognized as one of the top companies in your industry because of your ability to be first to market with new technology gives you a significant marketing edge. It also helps to attract new suppliers that may be able to help you make your supply chain more efficient and increase your competitive advantage.

Custom Orders

When you have control over your supply chain, that means that you can procure the materials necessary to create custom orders quickly. You also have the distribution network in place to get those custom orders to your clients quickly. If your company is able to offer larger clients the ability to get custom-made products that conform to the client's specifications faster than the competition, that makes your company an attractive option to those types of customers.


An effective supply chain management system identifies suppliers with the best pricing and helps to keep raw material levels in line with production needs. Your company is not holding on to thousands of dollars in raw materials it does not need when the supply chain management system works properly. Not only does this make your company more profitable, it also reduces your product manufacturing costs, which can reduce your retail prices. It can be a significant advantage to become know as a quality manufacturer that is also a low-price leader.


If a company does not have tight control over its supply chain, then adding new products or changing suppliers can become expensive. When the supply chain management system is working effectively, the company can switch to new vendors quickly when old vendors go out of business. The company also can find sources for new materials to help create new products that will allow the company to remain known as an industry leader.

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