The supply chain has always been an important part of business strategy and inventory management. A supply chain that is efficient will help a business to save money and also enhance customer satisfaction. This is achieved by decreasing the wait time for products that are in demand. It will give you a major advantage over companies in your industry. However, a supply chain that is ineffective can become a huge problem. That’s why it is essential to make plans to ensure your supply chain is lean and cost-effective. The following are some tips that can help you to improve the performances of your suppliers, in-house team and logistics providers.
1. Optimize the Company-Owned Inventory
Check the company’s inventory and keep the exact quantity you need. Ensure that you do just that. The price of storing and holding inventory is on the high side. This cost could represent up to sixty percent of the cost of an item that is kept in inventory for a year. Incorporate forecasting and demand planning so as to optimize the inventory owned by your company.
Another method of optimizing inventory is by making use of truck scales for efficient management. These scales will ensure accurate measurements which is helpful in determining the ideal amount of inventory to keep.
2. Improve Distribution Network
One of the most effective ways to improve your supply chain strategy is to enhance the distribution network. There are two approaches you can take. They are:
a) Cluster approach: This involves grouping graphs, charts and other similar documents. This will help to observe the processes of company functions.
b) Holistic approach: This involves the review of the distribution network’s essential components. It will also focus on ascertaining how components can work together.
3. Embrace Technology
You should make use of technology to enhance the supply chain. Examine all existing processes and pinpoint all the ones producing results that are not up to par. You should then determine how many of these areas can be improved with technology. An ideal technology such as industrial scales will be able to make a supply chain more streamlined, accessible and visible.
4. Create a Supply Chain Council
Create a governing council that will offer a concise strategy for efficiency and functionality. The aim of the council will be to direct and align supply chain strategy so that it is on the same wavelength as the core goals of the company. The council will help to remove barriers in the organization. It will also improve the cross-functional communication of the business. It provides opportunities for the leaders to offer effective chain management in projects of the future.
5. Regularly review procedures
The governing council has to review procedures and policies to make sure that they are compliant and efficient. It also reduces the occurrence of bottlenecks and it will streamline operations – thereby mitigating the risks of fraud and theft. Consistent reviews will help to identify risk elements and estimate their potential financial impact.
6. Establish Green Initiatives
It is important to reduce your supply chain’s carbon footprint. The logistics and supply chain have to be socially responsible and sustainable. When choosing suppliers, consider the impact they will have on the environment. Create a framework of policies and procedures that will promote sustainability.