Best Practices for Supply Chain ManagementIntegrate supply management systems. Build tools for clarity and collaboration. Eliminate cycles and maximize inventory performance. Make sure you have scalable solutions.
One of the most important factors to consider in your supply chain is to ensure that your supply chain meets your company's objectives, strategies, mission, and vision. The disparity between the views of corporate management and supply chain management can result in a loss of profits, time, and effort across the company. A simple solution is to create a supply chain council. The cost of maintaining inventory can reach up to a whopping 40% of the original acquisition cost.
Therefore, competitive companies find ways to better manage inventory strategies to reduce TCO and increase profit margins. Organizational alignment is key to the successful functioning of a company and its supply chain. Organizational alignment occurs when all departments understand the company's objectives and work collectively to achieve them. Many supply chains have been operating in silos, leading to ineffective communication, data flow gaps, and unreliable process outcomes.
Cross-training and cross-departmental execution are critical to aligning the company and achieving an efficient supply chain. Cost management and TCO incorporate all the costs associated with the various operations within the supply chain, from sourcing, production, warehousing, distribution, and financial and business costs. Understanding the impact of inventory maintenance costs, returns, logistics and distribution costs, order management costs, special deliveries, and payment cycles (both receivable and payable) will bring clarity and potential cost savings to the operation. Collaboration occurs at all stages of the supply chain process, from sourcing and negotiations to the delivery of products or services.
Providing the tools for staff to collaborate will streamline every process. The Industrial Internet of Things (IIoT) is an excellent example of how a digital ecosystem can be used to monitor and collaborate in manufacturing and can even be used to manage robotics. Successfully managing a supply chain may be the most difficult aspect of your business, yet it stands as one of the most crucial. There are many different ways companies can improve their supply chain management to increase operational efficiency, reduce costs, and provide a better customer experience.
The use of technology is vital to turn these best practices into reality, position the company on the path of successful supply chain management, and achieve high customer satisfaction, allowing for long-term success and growth. While hiring in the supply chain is a challenge, retaining talent is another area where some of the best practices should be followed. A formal risk management process must be documented and implemented to identify, prioritize, and mitigate supply chain risks for the future. Creating clear roadmaps for promotions and focusing on cross-functional labor mobility also helps companies retain their talent and develop a complete team that understands all levels of supply chain operations.
An efficient and successful supply chain must have access to real-time information and detailed supply chain analysis to ensure that supply chain managers can formulate data-based strategies and make data-driven decisions when needed. Establishing relationships with universities to establish a portfolio of students in supply chain, logistics, and project management programs for internships, entry-level positions, and professional development is another effective way to find talent with the necessary skills. A supply chain tip helps structure your supply chain through an overview of your company's needs and operations. Managing your supply chain could make the difference between substantial growth or the gradual decline of the business.
The adoption of technology in supply chain processes is no longer considered proactive, but a standard operation. By bringing all of this data and functionality together on a single platform, managers and operations executives can quickly see the current state of their supply chain and detect looming problems. Strategy is important in any supply chain operation, and this starts with identifying and defining the needs and opportunities of the operation to create a plan based on available resources. Investing in a solution that provides a centralized center for all supply chain documentation and serves as a comprehensive source for decision makers to review and manage all of a company's supply chain activities can provide greater clarity about end-to-end processes and, at the same time, eliminate disparate and ad hoc document management.
Many companies prefer a centralized supply chain management methodology, while others see decentralization as a method for achieving success. .