Between Covid-related production slowdowns, cross-border trucking issues and soaring fuel prices, companies have faced some of their biggest supply chain challenges over the past year or two. While you can’t control all of them, you can take some steps to strengthen your supply chain. The following tips will help your supply chain — and core operations — run more smoothly.
If you’re a believer in “you can’t manage what you can’t measure”, then you understand the importance of having access to data on your supply chain. This information can help you track crucial metrics like timing (what’s the complete cycle time of a particular process?); weak links (where are the gaps? where are the headaches?); and opportunities to save money (could some processes/purchases/deliveries be consolidated?).
Know your inventory
This builds on the previous point: You need clear visibility into what you have in order to efficiently and cost-effectively purchase more of what you need. Robust inventory management software will give you real-time insights like warehousing spend, spend by category, turn rates, stock-out alerts, year-over-year increases/decreases, and quality control information such as product conformance. Armed with this data, you’ll be able to drive better management, do more strategic sourcing, and lower your business risk.
Manage customers’ expectations through regular communication
Faster. Sooner. Better. As customer expectations rise, so does the pressure on your supply chain. Be strategic. Communicate with customers. Inform them. Send them notices and updates (within reason) on market conditions and potential interruptions that could impact service. The fact is, they don’t work in your world and they’re probably not aware of the complexity behind what you do. Without overwhelming them, you want to give them a bit of the “big picture” as a friendly reminder that certain factors are beyond your control — but you are keeping tabs on them and are doing everything you can to work around them.
Make sure Finance and Procurement are on the same page
Finance is intrinsically linked to every department in your company, but it is especially connected to Procurement. Procurement controls company-wide purchasing. It’s also essentially where your supply chain begins and ends. Which means that without a Finance-backed procurement strategy, your supply chain will not be aligned with broader corporate goals, and may not have full buy-in from leadership.
Build good relationships with your suppliers
Having a strong supply chain obviously depends on having solid, reliable suppliers, and an experienced logistics partner who can help you get a handle on all of it. But that in turn depends on building good working relationships. Keep in mind that behind suppliers are people — people who are often willing to go the distance for you, literally and figuratively, if you are good to them. Your success depends heavily on their timeliness and trustworthiness. So be sure to give them credit where it’s due.
Don’t overlook the impact of your indirect suppliers
Consider all the various consultants and contractors your business might rely on to run smoothly, from IT and accounting to cleaning and even catering. While these suppliers may not be delivering physical, raw goods, they are crucial to your operations, and you want to be sure you have an effective (ideally digital) system for managing them and their associated costs — particularly if their services are engaged by different people in your business.
Supply chains make the world go round: Every company relies on — and is a link in — at least one. For help strengthening your supply chain management, talk to our team of specialists at KN Logistics Solutions.