The supply chain is a dynamic, logistical-laden beast. It has so many interworking parts, organisations, relationships, information, technology and people. Everything and everyone is dependent on the suave execution of supply chain getting them the right goods and services, at the right time. They call it a chain for a reason — everything is interconnected, intertwined and linked to each other. When something goes wrong, it is a domino effect.
Luckily, there are a variety of options to improve your supply chain efficiency. You’ll be surprised at the results when you implement a few new supply chain strategies into your business. Your supply chain will experience a more streamlined way of functioning that will lead to quicker interactions all the way down the line. When thinking about efficiency, remember to align these principles to the planning, sourcing, making, delivering and returning processes in your supply chain.
Build better relationships with your suppliers
This may sound like a basic tip, but it is truly fundamental to creating a healthy and swift-moving supply chain. When you have a good working relationship with your suppliers, things will run smoothly. If something happens to go wrong, for example, a shipment is delayed or the wrong order of inventory stock is delivered, it’s easy to get in touch when you have a good relationship.
Make an effort to meet them face-to-face; going back and forth all the time on e-mail can be impersonal and not as effective. Pick up a phone, have a good conversation and make sure to schedule some time to meet them at their facilities. If you have a better understanding of how their facility operates and what inventory stock they are capable of producing it will be easier to understand the scope of their abilities. This will show you where they can help in different facets of your business.
Take a step back
When looking to improve processes, it’s important to step back and look at all of the current stages of your supply chain. Are there certain suppliers that are consistently late or provide faulty inventory stock? Think about what processes work well and which ones are slowing you down. Ask yourself if there are processes that can be done in-house or if there are other suppliers that can do it better. Look to simplify your supply chain and optimise the structure. With a new structure and strategic approach, you can build up or scale back your supply chain to create an efficient system.
Economies of scale
Once you’ve built relationships with your suppliers and you’ve decided what you need to do to make your supply chain run smoother, look at the number of inventory stock orders you are placing. Perhaps you can discuss better ordering schemes or discounts on bulk buying. Negotiate delivery amounts and order times that suit both parties. If you agree to buy a larger amount of goods, perhaps they can deliver it every two weeks instead of monthly. This could help you if, for example, you don’t have warehouse space for one month of inventory stock, or if your stock is a fast moving good.
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.