A business’ supply chain management strategy has profound, lasting impacts on its success, profitability, and ability to meet the demands of its customers. When this strategy is airtight and optimized, it serves as the backbone of business outcomes and supports a high level of organizational performance. However, if this strategy is not effective, or there are certain bottlenecks, it can have cascading impacts throughout an organization. Ultimately, the proper management of a business’s supply chain is key to ensuring a seamless operation that can withstand the conditions of the global market.
Why does a proper supply chain management strategy matter? Inventory-based businesses in the supply chain today face a myriad of challenges, which include staying abreast of technological advancements, operating in the face of market volatility, and navigating evolving consumer expectations. Additionally, the recent supply chain disruptions caused by the coronavirus pandemic underscored the vulnerability of traditional supply chain models, necessitating a reassessment and strengthening of strategies.
Recognizing the dynamic nature of the supply chain ecosystem, organizations must proactively and continuously evaluate and refine their supply chain strategies. By embracing a proactive approach to supply chain management, businesses can position themselves to not only weather challenges but also seize opportunities for growth in an increasingly competitive marketplace.
Here’s everything you need to know about revamping your supply chain management strategy.
Why Tighten Up Your Supply Chain Management Strategy?
Before we discuss exactly how to boost the supply chain management strategy in your business, it’s important to hone in on why it matters in the first place.
Inventory-based businesses today are operating in the face of nearly unprecedented challenges. As we touched on earlier, market conditions are unpredictable, competition is fierce, and consumers have very high standards for service (more than half of customers say they’ll leave a brand after just one bad experience). Overall, supply chain leaders say that some of the top issues they face are disruptions, running out of stock, and consumer demands.
The good news is that there are robust systems and advanced technologies that can help those who operate in the supply chain handle these and other challenges. But as it turns out, many inventory-based businesses aren’t taking advantage of the latest supply chain technologies and strategies: research has found that nearly two-thirds of supply chain managers still use spreadsheets and that for more than 45% of experts in this field, spreadsheets are the primary operational tool.
For most businesses in the supply chain, there’s room for improvement in some aspect
Steps to Improve Your Supply Chain Management Strategy
There are different elements to consider when improving your supply chain management strategy. Here are some steps you can take to overhaul the way you manage the supply chain in your business:
1. Conduct a comprehensive audit of your existing supply chain
To best improve your supply chain, you need to first assess its current state. Start by mapping out each component of your supply chain, from raw material suppliers to end consumers. Also, document each step of the supply chain process, including procurement, manufacturing, transportation, and distribution. This documentation can serve as a reference point for analysis and will help you identify areas that require improvement. Lastly, determine key performance indicators (KPIs) and metrics that you can use to measure the success of your supply chain.
2. Identify strengths and areas for improvement
After your audit, assess where bottlenecks and inefficiencies are, and where improvements can be made. This can be done by analyzing the cost-effectiveness of your operations, evaluating transportation costs and inventory holding costs, and diving into overall operational expenses. You can also look to identify scenarios such as stockouts and long lead times, to see where improvements could be made in these performance areas.
Additionally, you can use feedback from stakeholders (including team members and customers) to understand how performance is and benchmark your business’ performance against other industry leaders.
3. Improve and streamline processes
Now that you know where improvements can be made, it’s time to streamline and improve processes. You can begin by identifying and categorizing different types of waste in your supply chains, such as overproduction, excess inventory, and holding costs, and detail processes that will correct areas where resources are being underutilized or misallocated.
Additionally, you should lean on data to improve your processes. Accurate demand forecasts and insights into inventory analytics can help you order inventory as efficiently as possible, and ensure that you’re operating with lean principles in mind (while still meeting the demand of consumers).
4. Invest in technology and innovation
Today’s supply chain technology is advanced and can be a great asset when it comes to enhancing performance. To step up your supply chain management strategy, invest in technologies and systems which give you more accurate data and demand forecasts, and which help improve visibility into your operations. Specifically, these systems can help you reduce stockouts, improve service levels, reduce planning cycle time, reduce inventory, and optimize operations overall.
For example, StockIQ is a supply chain planning suite targeted at manufacturers and distributors, which provides you with advanced forecasting, replenishment tools, inventory tracking, promotion analysis, and SIOP support. Ultimately, intelligent technology such as this is designed to improve your processes while providing you with real-time answers to your most urgent questions.
5. Provide employee training and skill development opportunities
Since employees will be the ones executing your supply chain strategies, it’s important that they’re equipped with the necessary skills to execute their responsibilities, and that these skills are kept fresh. You can start by conducting a skill gap analysis, to identify any gaps in proficiency in both soft skills and hard skills. You can then deploy targeted training to fill those gaps, while also providing continuous learning opportunities, to ensure their skills stay sharp.
Aside from specific skills, you should hone in on technology training. Given the rapid advancements in technology within the supply chain, provide training on the use of new tools and software. This includes training on ERP systems, data analytics platforms, and any other technology adopted to enhance efficiency. Also, consider training when new features are launched or systems are updated, to ensure your team members are always making the most of your technology investment.
Best Practices to Keep in Mind
Aside from these steps for tightening up your supply chain management strategies, here are some best practices to keep in mind.
1. Regularly reassess your processes
Supply chain management is not a stagnant operation, and it functions in the face of changing conditions. Because of this, it’s necessary to regularly reassess your systems and processes: what worked in the past might not be as effective today. Keep checking in with your KPIs and metrics, and monitor your performance against industry standards and competitors.
2. Stay agile and adapt to changes as needed
Operating from an agile standpoint can help you and your organization quickly adjust to any disruptions or changes in your business environment. Plan for different scenarios (leaning on your forecasts and data), and develop contingency plans to ensure a proactive response to unforeseen events.
3. Build resilience in your supply chain
Building resilience in your supply chain helps your organization manage an array of challenging circumstances. You can diversify suppliers, equip your organization with advanced tools, and seek to improve visibility in your supply chain. When you have a 360-degree view of what’s going on, you can make the most strategic, targeted decisions possible.
StockIQ: Your Secret Weapon for Supply Chain Management
Improving your supply chain management strategy isn’t just about your supply chain: it’s about achieving desirable operational goals. If you’re ready to move the needle with the way you manage your supply chain, then StockIQ is what you’re looking for.
StockIQ helps you run efficiently, improve forecast accuracy, and reduce inventory levels, all while providing unmatched service to your customers and shippers. Contact us today to get started.
