It's time to ditch those outdated tactics. Supply chains tend to be large and unwieldy, and that leads many companies to avoid updating their supply chain entirely. But with new competitors constantly coming on to the market, companies have to keep their supply chain current. Here's where to start.
Updated Technology is the Key to Better Supply Chain Management
On a practical level, the key to better supply chain management is always going to be better technology. Technology is able to refine and optimize supply chain management in ways that people cannot. And technology is moving at a very fast pace.
Of course, this presents companies with a challenge. They need to be constantly pursuing newer and better technology, but that leaves them with a lack of time and resources for other things. A supply chain consultant can help a business construct an iterative method of improvement, which can carry the company through to newer technology in stages.
Automate and Standardize Supply Chain Functions
Begin updating your supply chain management by automating and standardizing your existing processes. Over time, supply chains grow organically — with new vendors and products being added, and new solutions being added on top of that. Some supply chains are using multiple solutions for different departments or vendors and are forced to consolidate their information among different platforms.
Standardizing and automating are the first steps towards true optimization. Not only does this grossly reduce the amount of time that needs to be spent on supply chain functions, but it also reduces the chances for mistakes and delays.
Use Real-Time Insights to Develop Demand-Driven Planning
Demand-driven planning isolates and reduces much of the risk for suppliers. With demand-driven planning, you lessen the chances of being caught with too much or too little of your goods. Today's machine learning, artificially intelligent technology can mine deep into your past, present, and future needs, identifying the ebbs and flows of your supply.
When your supply chain management has been properly automated, you're able to track your supply chain in real-time — and that means that your forecasting is exponentially more accurate. Accurate forecasting and supply are what drives efficiency, sustainability, and profits.
Improve Transparency and Collaboration Across the End-to-End Supply Chain
New technologies such as blockchain technology can improve transparency and collaboration by making it possible for goods to be tracked from the beginning of the supply chain to the very end. Blockchain technology is being explored for a number of applications: certifying that goods are environmentally-friendly, tracking conflict free gems, and (of course) optimizing supply chain management.
Through better transparency and collaboration, supply chains can be even further improved upon. Large amounts of data can be collected over the end-to-end supply chain to identify inefficiencies and redundancy. Over time, supply chains can be refined and a better understanding of how products are being transported and traded will eventually develop throughout the industry.
Maintain Sustainability as an Important Part of Supply Chain Operations
As with any other industry, supply chain operations can take on a "whatever works" model. But in order to be truly efficient, supply chain operations have to be sustainable. It's not just a matter of maintaining environmentally-friendly, ecological solutions (though this is important), it's also a matter of reducing risk. A supply chain operation that involves unnecessary steps is one that is both more costly for the business and more costly for the environment.
A pursuit of sustainability inherently improves a supply chain, as sustainability means that fewer goods are moved, that goods are moved less, and that less waste in general is created. Less waste for the business means more profit in the bottom line.
Monitor External Factors Such as Vendor Performance and Satisfaction
Vendors are an important but often ignored part of supply chain management. Technology makes it easier to monitor vendor performance and satisfaction, culling lower performing vendors and following up with vendors who are having issues with the supply chain process. Through this, many supply-related inefficiencies can be cut out of the system from the start, and the vendors that are more reliable and easier to work with can be emphasized.
Supply chain management needs to be in a state of constant improvement. But that's not always easy. When a business relies upon its supply chain, updating it can be a significant undertaking. Taking it step-by-step can help. You don't need to update the entirety of your supply chain management at once. Start with small, discrete improvements, and work from there.