If you’re on a mission to decide how to streamline your supply chain in 2019, you won’t be surprised to find out that central to the definition of supply chain management, according to Investopedia, is: “the active streamlining of a business's supply-side activities to maximise customer value and gain a competitive advantage in the marketplace.”
As streamlining is such an intrinsic part of supply chain management, the pressure is always on to find better, more efficient, more cost-effective ways of working. It’s fair to say that how well a supply chain performs can make the difference between a business that succeeds and one that fails – so how can you create a robust and agile supply chain? Here are some of the key areas to look at as you start exploring where to make improvements…
Review where you are now
Before you embark on your streamlining initiative, take some time to assess how well your supply chain is currently operating. Look at cost, dependability, speed, flexibility and quality – if you don’t already have performance metrics in place, set some clear and specific measures and agree how often you’ll assess performance, and whose responsibility it will be so that you can track progress. For instance, you might choose to assess the percentage of orders received correctly from suppliers during a set period of time. There are numerous metrics you can look at – you can find plenty of suggestions on how to measure your supply chain performance here.
Don’t forget to consider benchmarking your supply chain against your competitors, other sectors and best-in-class – this will give you a fuller understanding of your performance and where you need to make the most headway.
Once you have a clearer picture of where your supply chain needs strengthening, it’s time to prioritise the links most urgently in need of attention. Be sure to get to the root cause of why each specific weakness exists before you devise and implement a solution to optimise your processes.
Technology has transformed the supply chain almost beyond recognition – how far is your business along the automation path? How well are you using artificial intelligence (AI) to pass repetitive, predictable manual tasks on to machines? From improving warehouse efficiency to automating the generation and sharing of invoices between supplier and purchaser, technology can help to hone your processes and seamlessly speed up your operations. For more detailed information on how to use technology to improve your supply chain, read our blog here.
Use real-time data
Information technology and digital analytics can be used to track supplies and identify blockages in the pipeline – make sure that you’re using real-time data and spend analytics so that you can see exactly what’s happening before and after sourcing, and improve supplier selection, market analysis and supplier performance. This not only reduces risk, but helps you to build strong connections.
Refine supplier relationships
It might sound obvious, but the more suppliers you have, the larger the task of managing them and the more room there is for confusion. Could you use a single supplier to cover off a number of processes or products? Reducing your number of suppliers will have a positive knock-on effect, shortening the supply chain and resulting in fewer deliveries, less risk and a reduced workload. Sounds good, doesn’t it?
By taking a long-term view of developing stronger relationships with fewer suppliers, you’ll also be in a better position when it comes to negotiating new contracts, as well as reaping the rewards of greater supplier loyalty. A supplier portal can be an invaluable tool in making sure that you get added value from the optimal number of suppliers while communicating clearly with them and enhancing the relationship.
Identify crossover between the supply chain and legacy systems
Is crossover between the supply chain and legacy systems creating information silos within different departments? Perhaps simple daily tasks are being duplicated unwittingly, wasting time and creating unnecessarily complicated processes. This leads us on to…
Encourage good communication
Good communication might seem like something of a soft goal, but breaking down internal barriers will help to ensure that work isn’t duplicated across different departments, giving you greater insight as well as making for happier teams. Look at how easy (or difficult) it is for your teams to have visibility across the business, and whether existing communication channels help or hinder. Consider when and where communications habitually fall down and assess whether you can improve current processes or need to implement new tech to facilitate the smooth flow of comms in real time.