Supply Chain Optimisation: 4 Proven Ways to Optimise Your Supply Chain
Supply chains are the backbone of many businesses and need to be optimised if you want your company to keep growing. If you haven’t started optimising your supply chain yet, this article will provide you with some proven tips on getting started. The first thing to consider, if you haven’t done so already, is that establishing effective communication with your suppliers is the key to efficient sourcing. Doing so will enable you to anticipate shortages, delays or issues before they arise. There are many ways you can improve your current communication strategy to enable a smoother, more transparent flow of information with your suppliers. Relationship management, linked inventory management processes, and honesty are three key priorities. Supply Chain Optimisation should be a priority for all procurement departments.
1. Invest in technology
Investing in technology is a vital decision for any company looking to succeed. From new mobile applications and enterprise resource planning (ERP) supply chain management systems to robotics, there is plenty of innovation taking place within this space.
To maximise the benefits of these technologies, companies must be able to incorporate them into their processes and systems. This requires investing both time and money in digitalising all aspects of a business.
An integrated supply chain software platform can aid companies in tracking inventory and making decisions based on real-time data. With this knowledge, suppliers can reroute products to distribution centres or dispatch repair crews for spoilage prevention.
Supply chain leaders need the ability to quickly analyse data and filter through potential solutions in order to increase resiliency in an ever-changing marketplace. Furthermore, these executives must have the capacity to communicate facts and figures clearly so they can act swiftly when faced with challenges or disruptions.
2. Optimise your inventory
Inventory plays a major role in supply chain success, so it’s essential to optimise it. This involves understanding what you have on hand, where it’s stored, and when it should be shipped out to customers. You have to put this information into your business analytics.
Ideally, you should always have enough products in stock to satisfy demand, avoid backorders and overstocking, and keep logistics costs down. Furthermore, having balanced inventory levels also protects you against supply chain disruptions like extended lead times or raw material shortages.
Accurately forecasting your inventory amounts is critical, and it should take into account the previous year’s data and sales reports as well as analysis of the current marketplace and any developments that could cause changes in demand levels. Doing this helps you avoid carrying unsaleable products and losing money due to capital losses and write-offs.
3. Outsource
Establishing a sound supply chain is the foundation of any successful business, particularly when faced with an unpredictable marketing climate and shifting customer preferences. Companies often need to adjust quickly in order to stay abreast of market demands.
The challenge lies in maintaining a competitive edge while increasing efficiency. One solution to do so is by outsourcing some of your supply chain tasks, freeing up personnel and resources for core business operations.
A technology-enabled third-party logistics company (3PL) is the ideal way to tackle this task. They provide all of the technology, tools, and expertise you need for successful supply chain management. You may even take advantage of their warehousing and logistics solutions such as automated warehouse management systems and low-cost or no-cost shipping options with major carriers like UPS or FedEx. Outsourcing your supply chain allows for savings in both time and money while still maintaining a competitive edge in the marketplace.
4. Communicate with your suppliers
Communication is essential for developing and maintaining successful supplier relationships. It fosters trust, enhances risk management capabilities, and helps reach long-term objectives.
Despite its critical role, communication remains an area that needs improvement in many supply chain operations.
Communication gaps between suppliers and buyers can cause confusion, misunderstandings, and other avoidable issues. Fortunately, there are ways you can address this challenge to enhance your supply chain efficiency. Software that connects your entire supply chain provides your procurement team with the visibility they need to monitor supplier performance, manage trends and remain within budget.
Investing in the correct systems to support your business operations will be key to a smooth integration and upgrade of your supplier management and optimisation of your entire supply chain.
Optimise your entire supply chain with IoSCM. Call 0800 1422 522 today to find out how a professional qualification, tailored to suit your individual needs, will help advance your capabilities.