Strategies to boost your supply chain performance

The global business landscape is constantly and rapidly changing. However, some things are constant, and high customer demand has to be right at the top of that list. There always is (and will continue to be) high demand for products and for fast and convenient delivery methods. To cater to these requirements, today's supply chains work like complex business networks that need to be managed collaboratively and optimized globally to reduce costs.

The impact of the pandemic

While the pandemic disrupted the business supply chains around the world, they also proved to be an essential lifeline in providing food, medical supplies, and other necessities to those in need. This disruption has tested the resilience and efficiency of global supply chain leaders who aimed to maintain operations. The economic and operational crisis during the pandemic has exposed several vulnerabilities in supply chains to be addressed.

Here are the most significant supply chain challenges product-based businesses faced in 2021:

• Shortage of materials, supply, and labor in relation to consumer demand during peak season.

• Surge in customer demand leading to massive stock shortages, fulfillment delays, and lengthy back-orders on inventory items.

• Demand forecasting difficulties due to lack of visibility into siloed logistics data that adversely impact reporting and research.

• Increased costs of freight, fuel, storage, raw materials, and labor.

• Supply chain complexity involving multiple interconnected channels such as eCommerce websites, third-party marketplaces, traditional retailers, and wholesalers.

• Increased market demands for speed, quality, and agility.

• International challenges including trade disputes and economic pressures when suppliers, manufacturers, and customers are spread across locations and time zones.

• Regulations, compliance, and quality management standards including agreements, contracts, and controls with supply chain organizations.

A poorly managed supply chain is likely to succumb to these challenges which can cause a massive drain on business. Companies with an optimized supply chain gain a substantial competitive advantage by saving money, improving customer satisfaction, and reducing delivery times. If you want to maximize your company's supply chain performance while remaining as lean and cost-effective as possible, strategic planning is vital.

10 ways to improve your supply chain strategy

• Make your supply chain more agile

Any enterprise that transports goods can benefit from agility in the supply chain to adapt faster to a variety of internal and external operational factors. Give your business an edge over the competition with a supply chain that responds effectively to unforeseen circumstances, whether they’re environmental, economic, or consumer-based.

• Automate your supply chain

Achieve greater production efficiency through automated solutions. Automating your supply chain can help your company solve challenges such as peak workloads and stock-outs.

• Perform value chain management

Regularly audit your company's supply chain processes to ensure smooth and efficient delivery of products or services. Start by identifying your key processes and breaking them down into smaller components to fully understand how they perform. Once you achieve clarity around your business operations, you can make strategic decisions to reduce costs, eliminate waste, and increase profitability.

• Standardize key processes

Consider your business objectives to identify the best processes to standardize. Supply chain practices like tracking, automated ordering, and technology adoption can be configured to effectively support your business and reduce costs.

• Foster dynamic inventory optimization

A flexible inventory and warehousing system gives you the ability to fulfill orders faster, prioritize forward-stocking locations, and send stock where it's needed most. Shorter supply times lead to greater consumer demand. Finding the ideal stocking limit for your items based on consumer demand requires dynamic inventory control and real-time visibility of your stock.

• Have a robust supplier evaluation plan

A concrete evaluation plan is imperative for selecting the best-suited suppliers for your organization and maintaining accountability. Your evaluation plan can help you weed out and replace poorly performing suppliers. Establish a regular cost-benefit analysis practice to prevent post-payment defects and increase business performance at reduced costs.

• Implement demand planning systems

Demand forecasting errors can result in an order surplus, which is wasteful and costly to your business. Predicting customer demand for materials can ensure you deliver the right products in the right quantities. Use quantitative forecasting approaches or forecasting software to collect advanced analytics and distribution metrics. With these metrics, you can make informed business decisions, improve inventory flow, and select resources to bring your supply chain to the next level.

• Prioritize demand

Carefully analyze consumer demand and prioritize orders when you define segments based on products, locations, and KPIs to prioritize orders. Analyzing demand segments helps determine areas where your business can improve. Demand-based segmentation helps manage your entire product lifecycle, forecast demand accurately, and stock inventory accordingly.

• Increase data transparency

Eliminate silos, minimize mistakes, and smooth out issues in your operation with increased visibility. If everyone involved in a supply chain can’t access necessary data, your may experience costly slip-ups, like surplus product procurement.

• Review procedures regularly

You should evaluate your supply chain operations and performance at least once per quarter to identify weak points and emerging patterns such as late shipments, unfulfilled orders, and declining quality. Inventory management services and logistics management platforms can help quickly identify problem areas in your supply chain efficiency. Run end-to-end simulations of scenarios to forecast demand, predict issues, and get actionable insights to optimize operational metrics.

• Implement emerging technology

Staying competitive in the logistics landscape requires adopting the most advanced technology such as AI, AR/VR, and BI. The future of supply chain management will continue to include digital solutions for efficiency, automation, and cost reduction. End-to-end supply chain automation and multi-dimensional logistics systems can help your organization address operational kinks with modern strategies.

The takeaway

If there is room to improve your supply chain performance, consider implementing some strong integrated supply chain management strategies. The right strategies have the potential to transform your supply chain and increase revenue. If you already have some of these strategies in place, incorporating the remaining can add immense value to the supply chain. Building a sustainable and agile supply chain, choosing reliable suppliers, facilitating collaboration, and measuring the progress of standard KPIs against business goals can go a long way toward reducing your costs and improving efficiency. Implementing the right strategies with continuous process improvement can boost the performance of your supply chain, and provide higher value to your business.