The supply chain is a crucial part of inventory management and the overall business strategy. An efficient supply chain helps your business save money and improve customer satisfaction. It also helps reduce wait times for in demand products. It gives you a competitive advantage against other companies in the industry.
On the other side, an effective supply chain can be a huge drain on your resources. It is important that you plan it strategically so that the supply chain is as lean and cost effective as possible. There are a lot of management tips that can help maximize performance from logistics providers, suppliers and the in-house team.
Steps to Increase Supply Chain Performance
Check out the steps that can increase the supply chain performance
Evaluate your suppliers
The supply chain process begins with your suppliers. The first step in improving your supply chain should be to evaluate your supplier relationships. There is communication, reliability and speed.
Communication: A supplier to business owner relationship without good communication is considered a failure. It is important to analyze the effectiveness of your communication with your suppliers. Can they answer your emails within the given timeframe? Do you understand each other easily? Do you waste your time in explaining the same thing over and over again?
Good suppliers can be a bit responsive. The last thing you would want is to end up taking a loss on unsellable goods just because your vendor didn’t respond promptly to a design change.
Reliability: Suppliers must be reliable. If the supplier purchases the orders, ships the orders late or in any way fails to follow through on their promises, it will negatively affect your supply chain. A quick way in improving the supply chain would be to cut ties with suppliers who consider themselves to be liabilities. You should also check out supplier listings on sites to find an alternative manufacturer that can meet your needs.
Speed: If you want to maximize on your supply chain process, you must consider how fast the employers can complete the orders. If a supplier takes weeks to complete the production on your order, then you must reorder items earlier to avoid stockouts. This brings an additional risk if your demand planning winds up being off.
In order to maximize supply chain efficiency, take a look at how quickly the suppliers are able to ship the orders once they are completed. If you are running a lean supply chain where you are ordering only small quantities at a time, it may not be efficient to operate a global supply chain with a supplier half way across the world. A closer local vendor may be a better choice because you don’t have to worry about long lead times if your demand planning is off.
Analyze your supply chain strategy
Successful supply chains are cost effective, lean and dependable. If you ensure that your supply chain costs remain low while your process remains reliable, reevaluate your supply chain strategy and goals to ensure that you are using the best possible plan for your business.
Use demand planning
If you are not using historical demand data to forecast the customer demand data for your products, it is important to implement demand planning that can improve supply chain efficiency. For instance, if you know that a certain type of sunglasses get sold best in the summer months then you should work with your supply chain partners to ensure that you have enough supply to meet demands.
Analyze supply chain strategy
Successful supply chains are cost effective, lean and dependable. So if you want to ensure your supply chain costs you must stay low while your process remains reliable. It is also important to re evaluate your supply chain strategy and goals to ensure that you use the best possible plan for your business.
Check out these questions to consider:
Is my supply chain strategy appropriate for my business type? Am I making the best use of third-party logistics provider? Is my supply chain strategy resilient?
Eliminate data silos
It is a situation in which just one user has access to information that is needed across multiple users or groups. Data silos are bad news for any business trying to run a lean supply chain. If your demand planner and supply chain manager doesn’t have access to the same data, it can lead to costly slip ups. When you use a supply chain management platform it can provide greater supply chain visibility across your entire business. If you really want you can open up your entire supply chain including the 3PL providers. This minimizes the mistakes and smooths out a lot of kinks in your supply chain operation which means there is more cost saving for your business.
Monitor your system
Just because something works today doesn’t mean that it will work tomorrow as well. Smart supply chain professionals can keep tabs on the key elements of the supply chain to identify weak points. Inventory management services which include both logistics and supplier management platforms are a good way to identify problem areas in your supply chain efficiency. Has your business been experiencing an uptick in late shipment, unfulfilled products, orders and inconsistent quality. You must identify the source of those issues in your system, whether it is a 3PL provider, supplier or improper warehouse handling.
You must focus on finding reliable suppliers and logistics providers, build supply chain sustainability and facilitate the flow of information across your business by cutting costs and improving customer satisfaction. It is a process and continuous improvement is the ultimate goal.