Efficient management of the supply chain is necessary for all companies that deal with product movement, whether purchasing or selling. Any business that produces or sells goods must be very aware of the entire process, from purchase to delivery, especially because the internal organization can ensure higher levels of satisfaction with the buyers.
Basically, the supply chain is a group of methods that depend on one another, and require close cooperation between stages so that every action is controlled, managed, improved and executed successfully. Thus, a supply chain management model should include ways to provide better integration between the different stages in the supply chain, which means making sure that all of the logistical steps have the best performance.
Not only can accurate management promote satisfaction, but it can also be responsible for reducing the production cycle time, allowing the company to avoid waste of resources, improve the efficiency of the business and develop a competitive advantage.
Want to improve the productivity in your company? We listed some key points one must be attentive to in order to best manage your supply chain! Check them out below:
Supply and demand
Specialists claim that it’s critical to maintain a balance between supply and demand. The keyword here is forecast. The best method to anticipate demand is to look into the selling history and take the future demand expectations from it. If you need to forecast the demand for December, go back a year, analyze the data, apply comparisons of growth or decrease, and there you’ll have the expectation for the month.
Keep a supply on demand, especially if your company deals with perishable goods. That way, you don’t waste resources maintaining unnecessary inventory, that can become obsolete or be damaged, and save a lot of time when the goods are needed! Sometimes, that means keeping the lowest inventory levels possible, as the best policy to better control the storage costs, or implement a “just-in-time” process.
Selection and relationship with suppliers
Always partner with suppliers in which you see values that match those of your company. Don’t take into account only the fame or size of the supplier’s company – it’s more important to determine if they are able to help you develop and improve the quality and efficiency of your business. Sometimes, a smaller company can represent much more commitment and innovation than a big corporation.
Always strive to maintain a close relationship with your suppliers, being transparent about your company’s needs and expectations, so that the deliveries can match your standards. If something goes wrong, it’s easier to solve a problem with a partner who knows you and that you know well than to deal with someone you don’t know what to expect from.
Sharing the processes with the suppliers is a good way to keep a good communication channel. Allow your suppliers to access your databases and also keep tabs on the other stages of manufacturing and storage. By doing this, the supplier can work in sync with your company, improving the quality of the final delivery.
Manufacturing, storage and product delivery
The key to good supply chain management is integration. It’s very important that sales projections are made accordingly to the strategic planning of the other steps, such as production, department budgets, investments and operation planning.
There are plenty of ways to ensure integration in the supply chain. One good method to keep all steps coordinated is to use the same software to manage the supply chain, so that everyone involved can receive up to date information. One of the biggest concerns about managing the supply chain is the lack of communication between the stages, but the technology available can make this process quite easier.
It’s also critical that the procedures involved in the production line are documented, so that management can control the entire situation. First, it helps to establish quality standards, and also makes it easier to find gaps along the way.
But more important than that, the more information you have, the easier it becomes to recognize weaknesses and flaws. Our advice here is to gather all the data one possibly can about the company’s (and the competition’s) operations, and analyze those numbers. By doing that, it’s possible to identify, solve and even predict possible problems and conflicts faster.
If one step fails, the entire supply chain process is impacted. Thus, it’s really important that performance indicators are followed, to monitor the activities of every part involved in the supply chain. It’s important to say that some companies find it best to outsource some steps, or all of them (from production to transportation). But even if that’s your situation, it’s essential to know how the entire process must go, to maintain the company’s quality standard!
To sum up this article, here’s a list to help you better manage the supply chain in your company. One should keep tabs on the following steps – how it should work, how it actually works and how the process can be improved:
1. Demand forecast and product offer
2. Location of suppliers
3. Manufacturing process
4. Product storage
Besides those 4 primary steps, here are 3 checking points that can indicate the success or failure of the supply chain management:
1. Product delivery
2. Merchandise return
3. Customer feedbacks
As we’ve shown you, it’s fundamental to keep in mind that the supply chain management is a process, and as such, it cannot be treated separately. It’s true that a lot of companies have been investing in creating a supply chain management department for some time now, but remember: designating one person to worry only about the supply chain is supposed to make the process run more easily, instead of adding more complications and obstacles to the equation.
It’s all about the relationship between the company and its suppliers, so the manager must take into consideration that the entire experience has to be shared by everyone involved, balancing responsibilities and ensuring the highest quality levels possible!