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With consumers expecting more merchandise at a faster rate, retailers and suppliers are increasingly under pressure.
From supplier to manufacturer to retailer and logistics, there are keys to optimal supply-chain management.
Best practices necessitate knowing the state of your inventory. You must develop as much information as possible.
If you aren’t aware of problems in your supply chain, the bottom-line: You risk damage to your company and alienating customers whenever products aren’t available.
To make certain you’re managing supply-chain risk, here are six tracking and expediting tips:
1. Know your suppliers
Determine your most important suppliers. Some suppliers might or might not be what you think. Take into account financial, operational and sales data for each of them.
Know how they function and research their suppliers, as well as their customers. You’ve got issues if any of your suppliers have an insufficient number of customers or if they have inefficient suppliers themselves.
Literally draw a chart. List the layers and connections of their suppliers to understand their landscape.
One solution is to join B2B or an e-procurement networks. By collaborating with networks, you’ll learn valuable information for maximum efficiency.
Instead of just making knee-jerk reactions to disruptions, you’ll respond to situations and proactively anticipate problems and create opportunities.
Make sure your suppliers are adept at tracking and managing, too.
2. Understand the risks from cutting costs
The best deals aren’t always the best deals. When checking on raw materials and products, surely you want economies of scale. So beware of the risks from hidden costs.
Again, understand which suppliers might be having problems such as which could present sudden risks from delays, insufficient stock, or workforce strikes.
If you aren’t aware of problems in your supply chain, the bottom-line: You risk damage to your company and alienating customers whenever products aren’t available.
3. Take into account sub-contractors and outsourcing
Remember any outsourcing functions are part of your supply chain. You’ll suffer from a major interruption should you suddenly lose your payroll provider or your information-technology firm.
4. Pick the right software management and tracking tools
You must be able to track and manage your inventory in real time. With the right software, you’ll be able to align customer demand with supply – even with seasonal trends and fluctuations.
Successful businesses install source-tagging and RFID systems to transfer data – from the point of manufacturing to the point-of-purchase. Source tagging will keep you informed in real time on your supply-chain functions.
You’ll get a precise, timely snapshot of your supply chain. Then, you’ll make better decisions.
5. Align your marketing with supply
You don’t want to schedule a big promotion, if your marketing and supply teams aren’t fully synchronized. The two can determine how much of your products will suffice for the promotion. You also need to know how and when your products should be distributed.
6. Continue to develop response options
Continually review your strategies. Anticipate how to respond to reduce risks. For instance, to minimize costs or disruptions, consider ways to modify production measurements or formulate production controls to limit product quantities from specific suppliers.
From the Coach’s Corner, here are links to related articles:
Need a Great Manufacturer? Here Are 5 Tips — To save time and money for your supply chain in choosing the right manufacturer, you need to take at least five precautions in your risk management. It’s a painstaking process. What works for other companies, might not work for yours.
Your Supply Chain Can Meet the Expected Standards of Customers, If… — A company that fails to meet customer expectations on store inventory and delivery has problems in supply chain management. Such a company minimizes its profits. Worse, it’s a red flag about competitiveness and long-term sustainability.
Best-Practices in Protecting Your Supply Chain from Natural Disasters — As a manufacturer, you know the importance of protecting your supply chain for your company’s future. So you might be interested in an academic study — lessons from the earthquake that resulted in a tsunamis and nuclear catastrophe in Japan.
“When you went into a Boston Chicken and ordered quarter-chicken, white, with mash and corn, when that was rung up, that would signal all the way along the supply chain the need for more potatoes to be put on a truck a thousand miles away.”
-Stephen Elop
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