Efficient supply chains are essential to meet the challenging needs of a business, customers and suppliers—something that becomes much easier with the right digital tools. Here are 10 ways you can boost the efficiency of your supply chain to stay ahead in an increasingly competitive digital world.
1. Simplify communications for stronger collaborations
Simple communications remove communication barriers between you and your suppliers and improve decision-making so businesses and suppliers can work together more efficiently to meet the demands of customers, forecasts, promotions, seasonal spikes and prevent the build-up of unnecessary inventory. Good relationships with supply chain partners rely on sharing valuable information in real time so you can get the right product to the right customer at the right time.
2. Improve data quality for well-informed decisions
Many organisations find it challenging to gain comprehensive and accurate data in real time from multiple sources, usually because of the misalignment between their systems, teams and suppliers. The impact of poor quality data cannot be underestimated, it can cause a brand to lose its reputation, incur hefty fees and huge avoidable costs. Improved data quality from suppliers gives you a real competitive advantage: it minimises confusion, helps streamline communication, ensures well-informed decisions and helps improve:
- Planning and scheduling
- Demand planning
- Order optimisation
- Responsiveness in real time
- Inventory management
3. Streamline purchase order management with a single source of truth
Purchase order processing may not seem like the most exciting thing. But doing it well can save you a lot of time, effort and money. A single source of truth allows partners and suppliers to make accurate decisions based on the same information. The centralised location minimises duplication, reduces workloads, increases efficiency, reduces costs and helps standardise processes. It allows for a more comprehensive inventory, helps with volume purchasing and volume delivery to cut costs, resulting in more competitive prices. It allows a centralised contact for suppliers and keeps records and inventory in one central location to reduce data silos.
4. Focus on KPIs to assess and improve supplier performance
As far as your customers are concerned, your suppliers are your business. I know that everything cannot be under your direct control, but your organisation will be accountable to its customers for problems caused by a supplier. Procurement risk factors are a widespread problem, with supplier dependency and quality control being the main concerns. Problems stemming from suppliers can have an adverse effect on a brand’s reputation and ROI. However, supplier KPIs do help, especially when they focus on quality, ethics, prices, continuity, savings, compliance, risk and delivery.
5. Automate supplier onboarding to drive efficiency and compliance
Automated supplier onboarding reduces onboarding times, onboarding effort, overheads, workloads and increases flexibility. It allows staff to collect important supplier information from multiple sources and easily update information to ensure compliance and minimise risks.
6. Improve user experiences to reduce training needs and increase employee value
Increased standardisation means less duplication of staff efforts, resulting in a reduction in workloads and training needs. Centralised and streamlined purchase order management reduces the time and effort spent on tasks, leaving users to focus on more valuable tasks. Better user experiences allow users to dedicate focus to a specific area to specialise and further increase their value to the business.
7. Use one platform to reduce administrative costs
A supplier portal brings together purchase order management, quotation requests, demand forecasting, quality notifications and supplier KPI visibility. By using just one platform, you can simplify interactions between suppliers and purchasing teams to significantly reduce the time and effort spent on admin tasks. A single platform helps improve data quality, data accuracy, build more efficient processes and communications, resulting in stronger collaborations with suppliers. Managing supply chain data in one portal can also make it easier to manage transactions from many touch points.
8. Watch supply chain costs to increase your ROI
The cost of meeting demands and forecasts is where the supply chain really matters for a business to thrive. Streamlined procurement can save money, but unnecessary inventory can stifle cash flow. So do assess the costs of serving your customers and where costs can be reduced depending on which customers yield the least profit. This can also apply to your products or services. Ask: which products or services cost the most time, effort and money without yielding a good ROI? Increasing ROI can just be a matter of reducing or eradicating costs based around certain areas of the business, for example:
- Demands and forecasts
- Storage and inventory
- Product development
9. Manage your inventory well
Anything you need to store or transport relies on an inventory, so most supply chains will rely on their inventory. Working capital and cash flow can be directly affected depending on how well you manage your inventory. Good inventory management can help you:
- Better forecast to meet customer demands
- Reduce inventory holding costs, especially costs incurred from unnecessary items
- Reduce delivery times from suppliers
- Speed up delivery to customers
10. Align the supply chain with your business strategy
Supply chains can’t work in isolation from the business to perform well. Jeff Wallingford, a VP in supply chain strategy, wrote a useful article for IndustryWeek.com where he explains how to align a supply chain with the business strategy according to the following 6 steps:
- Define and communicate a clear corporate strategy.
- Identify the areas of your corporate strategy that are enabled by the supply chain.
- Align supply chain performance metrics with the corporate strategy.
- Structure your supply chain to optimise the strategic goals.
- Align incentives end to end.
- Keep refreshing the strategy and alignment process.