Taking the time to focus on supply chain efficiency can make all the difference to your business’ commercial performance. Done right, it will save you money and keep your customers coming back for more while making your employees’ lives easier on the ground, day-to-day.
Supply chain efficiency relates to an organization’s ability to get its products to the market in the right place, at the right time, for the lowest possible cost. This is mainly determined by the extent to which it can make the most of all available resources, including labor, technology, equipment and materials, to ensure a smooth production, distribution and delivery process from start to finish.
As you might expect, this is a complex operation with many moving parts. Success is heavily influenced by flexible, innovative approaches which don’t just respond to changes and challenges as they happen, but also take a proactive approach based on a culture of continuous improvement and risk reduction.
Customer satisfaction
A well-managed supply chain enables businesses to keep customers informed of their order status throughout the order process and deliver the right products in the expected timeframes, building brand loyalty and encouraging repeat purchases.
Increased profits
Keeping operational costs as low as possible across procurement, production and logistics by negotiating discounts, optimizing resource utilization and finding the best shipping routes allows businesses to create higher profit margins.
Competitive advantage
An efficient supply chain provides companies with the agility to respond more quickly to market changes such as demand fluctuations, emerging trends and shifting customer preferences. This puts them ahead of competitors who may not be able to react so quickly.
Order cycle time – average time between an order being placed and delivered. On-time deliveries – number of deliveries made on time. Inventory turnover – number of times all inventory is sold and replaced.
Collaboration
Sharing information between internal teams and suppliers ensures that all stakeholders have visibility of operations and are aware of any action they need to take to keep things moving.
Quality management
Ensuring quality standards are maintained consistently reduces waste and rework and the time and financial implications associated.
Risk management
Identifying potential risks to the supply chain and creating strategies to mitigate their impact can ensure operations remain as efficient as possible even in times of disruption.
1. Increase visibility
To improve supply chain efficiency, you need to have sight of its moving parts. Your supply chain visibility monitors products as they move through each stage of your chain, from the sourcing of raw materials to supply, manufacturing, distribution and finally delivery to customers.
Maintaining a detailed view of these activities means you can keep an eye on their performance, establish where improvements can be made and ensure things work better. Estimates and guesswork are replaced by accountability and informed action, which improves operations and ensures compliance.
2. Increase automation
As well as helping to free up your employees and reduce human error, automating processes where possible will connect your people, processes and technology, making your supply chain smoother and minimising the chances of anything being missed or mistaken.
This isn’t just about replacing human work with intelligent business rules or bots… but also involves assessing the various tasks that your people do, and linking them to viable automated actions, assignments, notifications and reminders. Then, regular reporting is useful to measure the difference in performance and efficiency.
3. Continually review supplier performance
Taking the time to regularly review individual supplier performance is really important to ensure KPIs and SLAs are being met, and things are running as expected.
These reviews are a fast and reliable way to identify areas where costs and risks can be further reduced, to improve efficiency and drive even greater performance by checking that products are being delivered on time, at the right quality and to the right places.
On this basis, action plans and processes can be developed and refined to drive a process of continual improvement, which prevent complacency setting in and gives you the confidence that suppliers are doing the best they can, across the board.
4. Leverage data
We’ve talked about the importance of accurately measuring supply chain performance in understanding and improving operational efficiency. But with so many people, processes and systems in place across the chain, this can be more easily said than done. All these moving parts generate vast amounts of data, so it can be challenging to extract the information which is most relevant and valuable, without spending time and effort getting there.
Organised and focused supply chain analytics bridge this gap, to help you unpack this myriad of data and ensure you use it in the best way for your business. As a result, you can see what’s working well and which areas require attention, all the way from sourcing and procurement to logistics and distribution.
By recognising consistent patterns and trends in processes and performance, this insight gives you the ability to make confident, well-informed decisions which will impact your supply chain efficiency for the better.
5. Consult the right teams
Supply chain efficiency is a complex and multi-faceted discipline. So, it’s worth talking to other stakeholders and teams who are pursuing similar objectives.
Approach your business and IT people to explore how technology and operations might be able to support you in making necessary changes, and which approaches will benefit you most.
Sharing information and ideas also fosters a collaborative working environment, which encourages greater transparency and trust between suppliers, distributors, and retailers.
As experts in driving supply chain efficiency through innovative technology solutions, Bizagi has helped organisations in a number of sectors to improve operations, introduce automation and connect suppliers, processes and people for the greater good.
We helped Unilever reduce time spent on repetitive, manual processes by creating a single master data management system, giving people visibility across departments and dispensing with the need for cumbersome data entry into multiple, siloed systems.
We supported adidas in eliminating some one million emails per year from its IT servers by integrating existing systems – which reduced operational costs by 60%.
Find out what we can do for you at https://bizagi.com/en/solutions/supply-chain
