With increased e-commerce dominance, consumers’ expectations and new habits dictate upgrading the business modus operandi on all levels.
And with all the worldwide situations happening constantly, we have to be prepared for all kinds of conditions. By that, I refer to the recent pandemic situation and the wars that are spreading over the globe.
One business segment that can be most affected by these situations is the supply chain.
Supplies are essential to any business, especially if you run a production. Also, keeping your consumers satisfied means delivering their products timely and promptly.
That is what the supply chain is all about. This is where you can make savings and improvements in your business by simply optimizing your supply chain.
If you want to keep your business on the scene and watch it grow, you’ll have to create a good strategy. Be prepared for the new age of online business and adapt quickly to any inconvenient events. Manage your supply chain smartly.
We’ll talk about this problematic business zone and how to improve it with some good optimization strategies.
What is supply chain management, and can we make it better?
As its name says, the supply chain is a chain, meaning it consists of various links. It connects all the steps between pre-production and the end consumer.
That involves all the people, organizations, and technologies that are in between those two ends.
Given that its functionality is the main factor in your consumer satisfaction, investing in its improvement is highly recommended, which can save you money in the long run.
If you’re not using it yet, then start using supply chain management. This segment will take care of all the issues you may have in the supply chain and help you get through them with ease.
When everything runs smoothly, your business will grow. It’s as simple as that.
And if any difficulties occur, you’ll be able to get through them without much struggle, thanks to good supply chain management and strategy.
There are always ways to improve any strategy, and we’ll discover the seven most important ones for supply chain functionality.
To answer the question in the title, yes, we can make it better. Here’s how:
1- Track fleet performance
The first step in the supply chain is usually finding a supplier.
Then you have to transport the supplies to your production storage, and that’s where the first problems begin.
If you’re depending on a supplier to deliver the goods, it may be tricky.
You could never be certain about the punctuality of their delivery.
That’s why most companies decide to regulate transportation themselves. That means having always available trucks to transport supplies to your quarters.
Even if you’re buying supplies overseas, you’ll need trustworthy transportation from the ports to the storage.
With your transport fleet, you can make better preparations and calculations for the delivery of the final product. But it’s not risk-free like nothing in life is.
You’ll have to keep track of your drivers and vehicles. Also, the maintenance of machines is involved here.
Using some new features and software, you can help the supply chain meet your and your customers’ expectations.
Use of fleet telematics
Fleet telematics systems can give you all the information you’ll need. Also, if you’re looking to save some money, consider implementing this telematic system into your practice.
Telematic systems can give you important information about vehicle location, driver behavior, engine diagnostics, and vehicle activity. It also visualizes data on the software platform, which can be very helpful in better and faster management of your fleet.
Also, it reduces maintenance costs since you can detect any malfunction sooner and fix it more easily.
In a word, this means maximizing savings through the use of data and technology (from energy efficiency to traffic control).
2. Incorporate new technologies
As with everything, supply chain management is evolving. The benefits of the 21st century are getting into this sector as well. Changes are fast, and keeping track of new technologies and methods is of great importance.
Here are some of the most important new technology trends:
Blockchain technology
Blockchain technology is a new, upgraded database method that allows the sharing of information inside your business network.
Instead of keeping information in tables, blockchain employs blocks of data. As each storage block is filled with data, more blocks are generated and ‘chained’ to the previous block.
These blocks are important records, and one main characteristic is that they’re unchangeable once they are in the database. This gives users precise date marks on every transaction. Also, the overall transparency gets better since all the data is timely stored and is easier to get to.
Cloud-based technology
Cloud-based technology is the use of the internet to access computing services and storage rather than hardware.
It has also become critical for many businesses seeking flexible ways to store and handle complicated data that is not bound to a local device.
The cloud has become a standard for storing and managing data, so it’s a must in today’s business world.
Green technology and optimal battery usage are some of the perks of using cloud-based technology. Battery management software is the best solution for this strategic approach, especially in industries reliant on electric vehicles (EVs) for logistics. This software optimizes the performance and health of EV batteries, ensuring efficient energy utilization and prolonging battery life.
As supply chains embrace more and more sustainability with the integration of electric vehicles, effective battery management becomes a main factor in reducing supply chain costs. This also contributes to a greener and more sustainable future for these businesses.
AI and machine learning
We have all heard about famous artificial intelligence and its expansion. Supply chain management is not the exception.
Businesses can adapt to changes in demand more quickly when they combine machine learning and artificial intelligence technologies. For example, to schedule supply chain activities and find areas for cost savings, managers could employ AI-based forecasting tools.
5G technology
One of the new technology features is the 5G network. Faster and more dependable connectivity is made possible by 5G technology, and that way, businesses can enhance supply chain collaboration and communication.
Data from the supply chain can now be gathered and analyzed almost instantly with the help of smart sensors. This not only speeds up the process but also lowers the cost.
3. Start supplier-managed inventory process
When everybody’s on the same page in the supply chain, there are fewer possibilities of any delays or disruptions in the whole process. Your suppliers must be on the same page as you.
Share your company’s demand planning and interact with your suppliers’ demand planning to ensure smooth supply and optimal inventory management.
You and your suppliers can obtain better transparency by sharing expectations and timeframes, which also saves the time and expense of resolving unnecessary disturbances. It’s a win-win situation for all.
4-Create reliable demand planning
Accurately forecasting the number of products that customers will want over a certain period is known as demand planning predictability.
Customer demand planning is key to cost reduction. Knowing what customers could expect may help you figure out what they want and when they’ll want it.
This saves money on last-minute expedited charges and other unanticipated supply chain expenses.
It’s a lot trickier than it seems, and you can feel like a fortuneteller sometimes, trying to predict the future. But, with good supply chain management, inventory control, and sales insights, you can do close enough statistics and avoid big mistakes, stockouts, and losses.
ERP systems and e-commerce
The use of ERP systems can be very beneficial in the whole demand planning process.
For example, if you’re in the automotive industry, using automotive parts e-commerce software that can easily connect with your ERP is the best option to increase your user satisfaction while at the same time cutting your expenses.
Creating an automotive parts e-commerce shop can help you get faster customer-product delivery and give you important data about customer demands, so you can update your supply chain and keep on track with their needs.
It will result in a better business reputation and customer satisfaction.
5. Make use of inventory management
If you’re not using it yet, it’s about time to start. Inventory management is a great way to track your stock levels and the transportation of goods, whether supplies or finished products.
Inventory management is crucial to minimizing waste, providing timely delivery to consumers, and reaching very accurate inventory.
In the end, this means that clients receive their orders on time without having to make additional payments, and you build a reliable brand.
The other links in your supply chain will work themselves out when your inventory is arranged correctly. Without it, you run the danger of making a long list of errors, including mispicks, overstocks, shortages, spoiling (when working with perishable stock items), and misshipments.
According to research, 21% of small businesses are lacking an inventory management system.
If you’re in that group, seriously consider making that step forward; it’ll pay off in the long run.
If you’re using this already, then congratulations! You’re doing a great job!
6- Avoid single-source supply
A wide supply chain is more likely to recover quickly than one that relies solely on products from one supplier or area. Make sure you have many sources for every product or service that is essential to your organization.
You should also investigate the geographical location of the vendors with whom you engage. Having three distinct suppliers will only help a little if they’re all in the same area affected by a natural disaster.
Relationships are the key to successful diversification. Make sure you have a solid relationship with the companies you work with, and always explore new methods to expand your network.
7-Be flexible
There will always be things beyond your control, no matter how carefully you plan. It is critical to be prepared for any potential emergency or disruption so that you are not caught off guard.
A flexible supply chain means that there are built-in solutions to potential issues and disruptions.
Having numerous vendors for the same parts or investing in technology such as artificial intelligence might be examples of this.
You can enjoy the benefits of good planning when flexibility is built into your supply chain.
As more businesses become aware of the possibility of breakdown, they are working to improve their processes. This means that if you aren’t actively working to improve your flexibility, you are going to struggle as a result.
This risk gets more serious in the B2B industry due to the necessity of creating relationships that last and maintain a reliable supply chain. Losing critical infrastructure will not only cost you time and money, but it will also harm every business that relies on you, and that’s not what responsible businesses do.
How do you maintain a study flow from suppliers to consumers?
Keeping the flow going is one big indicator of a good and developed business.
Supply chain management is the main actor in that play. And you are a director. What if you could make the play better? Would you coach the actor?
According to research, Excel spreadsheets are still the primary operational tool for 46% of supply chain experts.
If you don’t want to be part of those statistics, start using new technologies and strategies and make your supply chain fit for the new age.
Save your time and money.
