6 keys to successful supply chain management
Read time: 3 minutes
Complex global supply chains, increasingly demanding clients and the strong trend toward more customized products are putting more demands on supply chains.
In response, supply chain management—the design, control and monitoring of your supply chain—has come to play an increasingly important role for businesses. And while information technology is providing some solution to these problems, there are also more basic practices and concepts that remain useful in a complex, fast-changing world.
Whether you are just beginning to establish your supply chain or are looking to improve what you already have, here are 6 tips to improve supply chain management in your business.
1. Find the right people
The best supply chain professionals have strong communication and relationship management skills to deal with both internal and external stakeholders. They also have the ability to think strategically and create value.
Once you’ve found the right people, you’ll want to organize your supply chain to maximize their effectiveness.
Some companies place supply chain professionals in various business units, while others centralize their operations in a single department. You may also want to consider a hybrid approach that combines centralized planning with decentralized execution to provide better services.
2. Establish alliances with key suppliers
You shouldn’t simply be telling your supplier what to do. You should listen to your suppliers and create a partnership to achieve common goals. You’ll want to:
- Create a mechanism to ensure the continuity of the relationship;
- find methods to resolve problems;
- jointly pursue continuous improvement goals; and
- ensure that performance targets are being met
Such an approach will ensure that you use the talents of your supplier base and pursue continuous improvements.
3. Match supply chain and business line
Many businesses want their supply chain to simultaneously be efficient, fast, agile, customizable, and flexible. Yet these capabilities are often mutually exclusive and tend to require different skills.
One solution is to develop multiple supply chains within your business to respond to different supply requirements and cost demands depending on the business line it serves.
By correctly identifying the priorities of your business strategy, you will be able to organize your supply chain in a way that fits your business model.
4. Improve the flow of information
Getting the right product at the right place as fast as possible is one of the primary goals of supply chain management. To achieve this goal, many supply chains will tend to carry too many products at a time, leading to increased costs and inefficiencies.
To limit your inventory levels, focus on transferring information to your suppliers as quickly as possible. They will then be able to increase or decrease supply in accordance.
Just like inventory should always be moving, delays in information transfer should also be tackled as soon as they appear.
5. Make technology work for you
Before selecting what technology solution you purchase, review what part of your process you want to improve and select technology that best satisfies your need.
Many individual software solutions manage parts of the process, but there are very few overall solutions. Also, many individual software solutions do not integrate well with other software, which means that information flow is severely hampered.
Generally, the size of the software solution you require depends on the nature and complexity of your business.
6. Get outside help
An outside perspective can help you evaluate your business processes and eliminate waste.
Whether you are trying to implement a just-in-time inventory management system or simply trying to increase your company’s operational efficiency, hiring an expert to look at your overall supply chain management and production process is probably a good idea.