Market balance or market equilibrium is a point where supply and demand meet in perfect conditions. Everyone is familiar with the basic principles of demand and supply. Demand equals the number of products or services that consumers are willing to buy at a set price, and supply is the quantity that companies or producers are willing and able to sell.
It all sounds pretty simple, but only if both sides meet in the middle. But in terms of a free market, instabilities are bound to happen due to internal, external, micro, or macro influences. Some things companies or consumers can’t influence. Market disruptions can throw things out of balance.
There are scenarios where producers of inputs have too much or not enough product on stock. Buyers, or processors, will have to adapt accordingly. The second scenario is when those processors have slow demand from their buyers, and won’t require inputs in the same quantities as before. It’s a chain reaction, from input producers to processors and end consumers. Each of them creates certain levels of demand or supply, whether it concerns goods or financial assets.
A new wave of software solutions for supply chain management
There is a new shift towards achieving market equilibrium or balance. And it’s through the usage of software solutions. The market has changed so much that it needed to keep up with technology trends. Rather than being limited by technology, companies decided to embrace it. And from our point of view, that meant opportunities to delve into software solutions that will improve the B2B buyer’s market.
Working on a solution that provides supply and demand in one place is a good way to start delivering value to procurement first. This software solution offers suppliers to post the quantities and prices of their goods. Procurement or buyers can then buy the quantities they need from one or more sellers. An added feature is the ability to contract haulers to transport those same goods. Why and how does this bring balance?
Well, firstly, it saves time for the buyers since they don’t have to search for goods manually and go through contacting each individual seller. After that, they don’t have to waste time finding the right available hauler. Buyers can match the quantities they need with the quantities available, thus striving for that balance. But buyers are not the only ones at an advantage. Sellers of inputs are not conditioned by one sole buyer to deliver goods at a certain price and quantity. They have the option to offer their inputs to multiple buyers and get the most profitable offer for them. There is a price negotiation option, so sellers and buyers can come to terms when deciding on a price that fits both sides.
Haulers also benefit from this solution. If they have trucks available to transfer loads, they can offer their services and set a price that works for them. This way they can actively search for loads and avoid having trucks standing still in the park lots which causes costs.
A software solution that presents supply and demand basically at the users’ fingertips, shortens the time spent on finding the right resources, in terms of goods or transportation, and lowers costs. It also offers the option to create direct contracts between buyers and sellers.
So, imagine a place where hundreds or thousands of sellers and buyers can meet and work together. It’s an organized platform to make market dealings easier. It tries to connect supply and demand at the right time so there is a quicker time of goods movement which keeps the market in constant motion. It allows for a more dynamic, but stable market.
Even in times of goods shortage, the software gives an overview of the market and users can draw conclusions if there will be disruptions in the market. They can anticipate changes based on the current market status and prepare themselves for those shortages or surpluses. There is more control and power for each market participant.
Software solutions will play an even bigger role in enterprises, various industries, and markets. They will be built for optimizing business processes. The vast possibilities software solutions provide need to be utilized to empower all participants in the goods or services exchange. Technology should be an advantage and used as a resource to uplift and improve business operations, especially those involved in the supply chain. And such solutions are easily adaptable across various industries. They are especially beneficial for perishable goods when they have to move quickly.
What’s the value?
Market balance or equilibrium presents the optimal market. We have all faced times when that wasn’t the case. Those situations ended either in price wars or price gauging. Neither was optimal. A software solution built to specifically meet the demands of both buyers and sellers of goods to be used in production will help minimize that. Or at least prepare both sides for upcoming disruption.
Optimization and effectiveness are the end goals here. Working smarter is an objective for all. And it can all be achieved with a tried and tested software solution built to bring supply and demand to one place. If you are in an industry where you constantly buy goods for your plant or production, this is the way to go. If you are an input producer, this is how you’ll get to the right buyers at the right time. And if you are a hauler, this is where you can easily access available loads. Those are three sides of the market whose operations just got a bit easier and more structured.