Supply Yourself With Strategies! Here’s How to Make a Good Supply Chain Strategy for Your Company!

Your company’s supply chain can make or break your business. If you have an efficient operational strategy, you will be able to get your products delivered to your client on time, which could result in repeat business and referral business.

On the other hand, if you have an inefficient operation in place, then bad reviews from unsatisfied clients will be your downfall. For you to streamline your operations, you need a supply chain strategy that can qualify for a sigma six seal of approval.

What this means is that your supply chain management processes should be so efficient that your business can pretty much fill orders as soon as possible. Read on to learn how you can improve your supply chain.

Real-Time Inventory Management

Invest in a supply chain management system that is intuitive. Opt for a refined Enterprise Resource Planning (ERP) software that is developed specifically for supply chain management. It will be easier to customize to your liking.

Fortunately, you can now find cloud-based software that will only cost you a startup license fee and a monthly subscription fee per user, which is cheaper than purchasing an ERP.

Look into getting one that can take stock and monitor inventory levels. Depending on the software, you can set limits to enable you to get a notification when stocks run low.

It will save you the embarrassment of having to cancel a client’s order because some items are out of stock.

Data Management

Invest in data analytics. This could be in the form of software or staff training. Being able to analyze your data will enable you to track consumer trends and demand. Thus enabling you to stock accordingly.

Proper data management can be a source of cost-cutting once you master your stock. Especially if you don’t order too much of a product that’s not popular — and instead stock products that are in high demand.

You also get to know which seasons affect particular products in stock. You can also be able to rearrange your stock per season for easier order filling. Supply chain improvement is dependent on proper data management.

Vendor Management

Adequate stock plays a key role in increasing your company’s supply chain efficiency. If you have vendors who never refill your supplies on time, then chances are you will not be able to fill your orders on time as well.

As such, you need to keep track of all your vendors. Send out a memorandum to all your vendors notifying them of the ongoing changes and what you expect of them. Then keep track of their performance going forward.

Do not be afraid to find replacements for vendors who do not value your business. You cannot work with people if they are playing a role in hindering your company’s growth.

Make sure that all future vendors are informed of your terms beforehand and the consequences of not delivering.

Quality Management

Defects can increase the time you take to fill an order, especially if a received batch is completely unusable. This means that you will have to wait for the vendor to replace the bad batch before you can fill an order.

To avoid this issue, you need to come up with a quality check system for inspecting all new supplies before they are accepted. Develop a checklist of what will pass as being good enough for restocking and what defects will not be acceptable.

It will save you the trouble of having to hold stock as you decide whether the stock meets your quality standards or not. Sigma six revolves around performing defect-free work and as such, delivering a faulty product is not acceptable.

Payment Management

Synchronize processing of payments to ensure that you don’t put orders on hold as you wait for payment confirmation. An ERP system will be able to do this. As the order moves from the sales department to the accounting department, an ERP system will be able to ensure that all orders are filled as per their payments.

Once the payment is confirmed, the order can be filled using the details from the system. As part of your supply chain improvement, you need to ensure that other departments are on board.

Business Process Management

Piggybacking on the idea of getting other departments in tandem with the business process improvement goals, you need to ensure that other departments do their work on time. If an order takes too long to move from the sales department to the accounts department, that order will not be filled in time.

As such, you need to create departmental charters for all the other departments. You cannot clean your kitchen and leave the rest of your house covered in filth. Business process improvement is a collective effort and not the responsibility of one particular department.

Have a brainstorming meeting with your entire team and discuss what you intend to achieve and ask for pointers on how to best improve the process. Ensure everyone is on board and address any issues that may be raised by the naysayers.

Essentially, if all the other departments are not onboard then your effort to streamline your supply chain is a waste of time and resources.

The Key to a Successful Supply Chain Strategy

Follow the five stages of coming up with a supply chain strategy. First and foremost, analyze your current operations and understand how the supply chain relates to the rest of the business. Research various models or strategies and pick out the best option for your company.

Come up with a plan of how you intend to develop an efficient supply chain. Set your objectives and goals to evaluate if your strategy is working. Next, you need to implement your strategy and record data as you go along.

Once you have reached your milestone, review your strategy and revise any sub-strategies that are not working for your company. For more information on supply chain improvement, contact us today.

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