Last updated on January 30th, 2020 at 09:19 am
Supply chains these days are quite complex and under constant threat of uncertainty, volatility and risk as compared to those in yesteryears.
Customer demands fluctuate constantly and the growth of businesses is getting accelerated, putting immense strain on the operational capabilities.
Moreover, lack of collaboration and visibility across the supply chain is negatively impacting the time required to make critical decisions.
It is getting increasingly important for the supply chain to keep pace with the demand, which is another pain point in most supply chains.
Here are 8 ways to overcome these challenges and improve the supply chain at every step
1. Predicting Demand
There is no way to accurately predict the future but you must hone the forecasting ability as it will greatly benefit the business. In fact, forecasting can make the difference between a successful product rollout, or a dented brand reputation due to product shortages.
Prepare well for the surges in customer demands and for periods of a lull so that you can tackle any kind of demand market.
This will help you keep your customers satisfied and earn their trust so that you can deliver the goods on time, in any location.
2. Adopting Lean Practices
Following the ‘safe road always taken’ will curb innovation and keep the supply chain running wasteful and remain rich.
Rather, focus your attention on making the supply chain lean and efficient.
When you strive to make continuous improvement in the supply chain, you will identify opportunities to streamline work and minimize waste.
Further, you can identify techniques to package better, thus ensuring less breakage and a lower rate of returns. Look for cost-saving techniques to reduce overhead.
3. Redesigning Transportation
Transportation is a significant part of the supply chain.
Using industrial floor scales, counting scales will help you keep track of exactly how much and how many products are being transported at any given time, from any location.
Look for a carrier who will provide you with efficient transportation options.
For example, there are numerous small parcel carriers that offer cost savings on multi-piece shipments which do not involve a full pallet or multiple pallets. Look at various carriers to understand the pricing difference for various weights and zone break points.
Consider changing the mode of shipment or transportation routes if that would benefit the supply chain in any way.
4. Real-Time Visibility
If you want the supply chain to function smoothly, you must be able to track and manage the inventory in real-time.
If you don’t have the ability to alert any potential shortage of inventory and relay information about bottlenecks in the supply chains. You can expect costly delays and expensive expedited shipments.
When you have the ability to adapt to demand and inventory changes in real-time, you can manage events like seasonal fluctuations, unforeseen shipping delays and competitor launches more efficiently.
5. Standardizing Processes
Having standardized processes help in having a successful supply chain strategy.
It increases efficiency and saves time and money. Process standardization will ensure that all the employees share a standardized system of tools. Thus increasing accuracy, reducing miscommunication and boosting teamwork.
6. Monitoring Finance Flow
Track the payment terms and conditions with different groups that are associated with the supply chain.
You need to understand how to pay for the logistics and various suppliers, the different payment tools you can use, how often you need to pay the suppliers and track the additional expenses.
Monitoring the finance flow will help in streamlining the cash flow.
7. Better Returns Management
A strong supply chain will definitely need an efficient returns management system.
You must be able to efficiently handle the returns so that they can be re-processed or re-manufactured quickly.
Numerous manufacturers focus more on moving new products out but fail to give proper attention to the returned goods.
If you can manage these returns better, you will not only reduce waste but also identify consistent product problem factors.
8. Setting Clear KPIs
Setting the right key performance indicators (KPIs) depends on the needs of the business, target market segment, the product, the total cost of production and the stability of supply for basic and critical products.
KPIs can serve as a good incentive to the supply chain personnel to work towards increasing the value of the business and protect it against risks.
The KPIs help in guiding the team towards the required goals. Don’t set ambiguous KPIs and unimportant metrics. Keep it clear and simple. It is extremely easy to set up appropriate metrics with the help of a tech-savvy team.
Keep striving to improve your business’s supply chain as it is important to develop and transform the supply chain with time and investment.
Enable your supply chain with sustained top management involvement in order to enjoy a competitive edge and a significant increase in the performance of the supply chain.