Manufacturers typically perform planning, sourcing (finding suppliers), making (manufacturing), delivering and returns. Supply chain efficiency, therefore, is the measure of getting the right product to the right place at the right time — and at the least cost. Remember, efficiency is not the same as efficacy.
Traditionally, supply chain management was a top-down approach. However, recent research shows that best practices to improve supply chain efficiency is to actually get your relevant department experts who work the details of your supply chain day-to-day to provide valuable insight. Below we outline four strategies to improve supply chain efficiency for manufacturing business owners.
Communicate efficiently and collaborate with internal operations
More successful manufacturers make a commitment to scheduling periodic and effective meetings to give their team members an opportunity to address upcoming logistics situations in advance.
Face-to-face meetings are valuable to avoid miscommunications and clarify any vague overviews. When further evaluating these key areas, team members can often identify redundant processes that waste resources and illuminate large scale process changes that will radically improve your business operations.
Increase information sharing and visibility
More transparency in logistic processes can help improve supply chain efficiency for your business that not only benefits your business but also your workforce and your clients. It is important to abolish slow, unreliable spreadsheets to provide information. Share the most up-to-date information through current technology solutions that fit well with your business and key stakeholders. By informing your workforce and your clients, you create opportunities for innovation that may unveil better solutions to gain efficiency in the supply chain.
Partner with your current suppliers
Current suppliers should play a key role by becoming less of a mere cog in a wheel of a supply chain system and more towards an important partnership to shape the system. Actively looking for opportunities to improve current processes by leveraging supplier capabilities empowers both parties while benefiting the ultimate consumer – a valuable win-win situation for all. Here’s how to improve your relationship with your suppliers.
Many supply chain challenges facing business are market-wide, and developing effective solutions to mitigate risk may require the kind of scale unavailable to a single partner within the chain. Creating a mutually beneficial strategy can be difficult but is not impossible with careful planning with clearly defined and measurable objectives, and relevant information transparency.
Measure, review and revise
Improving supply chain efficiency is a continuous and iterative process, that needs to be measured, reviewed and tweaked in order to stay effective. There are many supply chain performance measurement metrics to help do this, however, commonly used is the Perfect Order Index. This is a measure of an order that is delivered on time, complete, damage-free and with correct documentation. Although originally developed for the retail industry, this metric is an excellent tool to identify poor and strong performance areas. Whichever metrics a business uses, note it must be in synergy with the overall business strategy.
For businesses to remain competitive in an increasingly global marketplace, improving supply chain efficiency is needed. These plans of action we have outlined are designed to help improve supply chain efficiency with the goals of reducing waste to generate cost savings and reduce risk, ultimately to have the best impact on your business’ bottom line.
Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.