Any business selling products earns its success and revenues based largely on how efficient its supply chain is.
When a supply chain operates efficiently, you have growth and profits. It eats into revenues and operations when it isn’t organized or encounters difficulties without resolution.
An effective supply chain is a must but requires ongoing refinement to keep it performing optimally in an evolving and competitive market. These tips for optimizing a supply chain can drive growth and reduce costs.
Automate the Processes You Can
Leverage automation. Use it to perform the mundane and simplify the complex. When possible, use automated processes to increase efficiencies.
You can use AI to improve your supply chain. AI can automate various supply chain tasks, from demand forecasting to inventory evaluation. It can also provide suggestions on improving operational challenges, resolving logistics disruptions, highlighting areas for improved sustainability, and running simulations of risks and analytics.
Shorten Delivery Times
There are many ways to reduce delivery times in the supply chain. Use a domestic supplier. Increase order frequency. Consolidate suppliers. Look at any opportunities to cut down on supply chain delivery time.
Consider a Third-Party Logistics Company
Running a supply chain is challenging enough. A third party logistics company can take the heavy lifting off your hands, helping you coordinate inventory storage and shipping. They take over much of the supply chain, ensuring its day-to-day management doesn’t bog you down.
Use Analytics to Reduce Risk
Automation of supply chains generates significant amounts of data. Use those insights to reduce risk. Risk will always be present. Eventually, something will go wrong, and your supply chain must adjust or adapt. Reduce the risk of failure as much as possible, using data to adjust as needed.
Have Strong Customer Service
Customer service has become an afterthought. Don’t let that happen with your supply chain. Ensure updates are provided when a product is being shipped. If there is a delay, we will get back to you. Keep in contact with customers from the moment an order is placed until delivery is complete.
Invest in Quality Control
If you don’t have a quality control office, consider hiring one. They can help prevent discrepancies within your supply chain and ensure everything meets your performance standards.
Evaluate Your Shipping Costs
As your supply chain grows, you may nab a better shipping rate with bulk orders, smaller parcels, different packaging, and similar concepts. A business willing to move inventory warehouses may also save on shipping if the warehouse is more central to where customers are located.
Predict Demand As It Relates to Inventory
Reduce overhead costs in slow periods by ordering less inventory and reducing storage needs or costs. This can be done through demand forecasting and analyzing prior years’ numbers to gauge customer demand for specific products.
Talk to Your Supply Chain Stakeholders
Communicate with your suppliers, manufacturers, retailers, and any other members of your supply chain to get their take on what improvements can be made. They may suggest ways to cut costs and increase efficiencies that surprise you.
Have Transparent Communication
As you make changes and re-calibrate your supply chain, communicate transparently with your partners. Ensure your needs and expectations are crystal clear, and they know what to expect from any change. Eliminate confusion at the source.
Don’t Try to Manage a Supply Chain In-House
Overseeing an entire supply chain will eventually lead to massive amounts of time and effort you shouldn’t have to spend. Unless you’re an expert, outsource some supply chain activities to third parties in logistics, procurement, and customer services.
Improve Supplier Performance
No business can do everything in a supply chain without partners. Monitor your suppliers, ensuring accuracy in preparing orders and on-time performance. Evaluate suppliers and improve performance. If a supplier cannot meet your standards, consider alternatives.
Adapt to Costs Rising and Falling
Many variables in a supply chain are prone to cost increases and decreases. Resource costs, carrier changes, transportation costs, manufacturing costs, inventory management and storage, and order fulfillment are examples of how costs rise and fall. Adapt quickly to retain high-profit margins.
Invest in Premium Supply Chain Software
Supply chain management software will act as a centralized management system to monitor all aspects of your logistics operations. See how different areas of the supply chain work and what they generate in terms of numbers.
