Supply chain management is an activity taken on by companies, or their logistics and supply chain partners (like Logistics Plus), to develop and operate supply chains in the most effective and efficient ways possible. The concept of supply chain management focuses on one core idea: practically every product in the world reaches an end-user. The more steps there are in a logistics plan, the more efficient your supply chain process needs to be. Here are five tips to effectively manage your supply chain.
1. Develop a Supply Chain Strategy
Although it seems like common sense, few businesses actually develop a written supply chain strategy. Effective supply chain and logistics management are all in the planning. The fewer decisions that need to be made on the fly during the transportation process the better. Although a solid plan won’t cover every circumstance, it will limit the number of decisions that need to be made. A good logistics provider will plan well ahead to eliminate supply chain disruptions as best they can.
2. Always Have a Contingency Plan
No matter how good your logistics plan is, disruptions and delays are inevitable. After the plan is made, the job is far from over. Your logistics department, or provider, should have contingencies for every element of your plan if something goes wrong. You should also know when to stick with your original plan rather than switching to your backup.
3. Leverage New Technology
Technology that exists today plays a major role in strengthening supply chains. The most successful supply chains incorporate technology such as warehouse management systems (WMS) and transportation management systems (TMS) to automate processes. By speeding up decision making, technology-driven supply chains play a large role in helping companies gain a competitive advantage.
4. Align Your Supply Chain With Your Business
Sales and operations collaboration makes it easier for companies to align supply chains with their business. One great way to do this is by focusing on employee development. Investing in the necessary training and skills for employees allows them to understand the impact processes have on the business.
5. Learn From Your Mistakes
Depending on the size and complexity of your company, poor supply chain management can cost your company hundreds of thousands of dollars each year. The most important thing you can do when optimizing your supply chain is to identify your mistakes. As a result, you can shift your focus on putting systems in place to ensure the same mistakes don’t happen again.