COMMENT: Six ways to increase supply chain performance
By Kevin Hill
When you have a high performing supply chain, you can be assured of increasing business profits due to improved inventory, quicker client deliveries and shorter supply chain management. Further, it helps in reducing decay of your products. Doesn’t it sound like a good idea to optimize supply chain management? Let us look at some strategies that you must consider to optimize the supply chain management, increase its performance and streamline various processes associated with it.
6 Tips to Increase Supply Chain Performance
1. Devising an effective distribution strategy
Formulate a distribution strategy that helps you keep a track of how your product is being distributed and handled along the supply chain. An effective distribution plan helps in shortening delivery times, improving customer service and reducing the decay of the existing stock. This will translate into higher profits and strategic asset utilization. It is important for you to keep a check on warehouses, production facilities, locations and network of your suppliers and cross-docks too. Remember that your distribution practices should align with the overall business strategy and goals.
2. Monitoring the flow of finances
It is essential that you monitor how the finances flow in your supply chain. Track the payment terms and conditions with a number of different groups associated with the supply chain. Understand how you have to pay for the logistics and various suppliers, how often you need to pay them, the different payment tools that you can use and other associated expenses. This helps in streamlining the cash flow.
3. Setting up information conduits
Information is the king in any business. The data you share with your employees and customers and how you share it will determine the success of your company. Establish information conduits through which you can distribute data properly and promptly to the necessary people. Further, it helps in tracking the data being shared too.
4. Tracking your inventory diligently
Use tracking software to monitor and track your inventory. It will not only help you identity how much inventory you have but also its location, available raw materials, etc. The employees must be encouraged to log information regularly and accurately. Create routine inventory assessments to enable you in the process of inventory tracking. Use relevant technology in different processes such as weighing to help you achieve high efficiency. By using outdated weighing techniques, you are essentially taking a short cut to disaster. Incorporating technology like truck scales and industrial weighing scales will offer seamless weighing operations and enhance the overall efficiency and productivity.
5. Identifying innovation partners
Being a part of supply chain, you must always look forward to collaborate and work with partners who enable you to grow and achieve your business goals. Identifying and working with innovative partners will not only help you take giant strides towards success but also utilize latest innovative technologies and smart strategies that can offer you a competitive edge. You can collaborate with partners to produce innovations in your products and services as well.
6. Monitoring the performance of every single supply chain partner
It is said that you are only as strong as your weakest link. Even if one supply chain partner fails, there will be serious consequences through the chain. Thus, it is crucial to constantly monitor the performances of all the supply chain partners to ensure that they are functioning optimally at every stage. It would be advisable to create a system where you can measure the performance of the supply chain and implement corrective measures if and when required. Replace partners if their performance is not up to you standards.
By incorporating these strategies, you can notice a significant increase in the performance of supply chain management.