An optimised supply chain performs efficiently and ensures that customer satisfaction levels are high. Investing in the process of optimisation is smart, as it will not only improve the way that business is functioning operationally but also provide you with more tools for building stronger relationships with your consumer base. The ultimate objective is not just cost efficiency but also ensuring that your customers get what they want from your business, when they want it. So, where do you start when it comes to supply chain management?
The decision making process
There are two key levels of decision making that can have an impact on how optimised your supply chain management is. The first is top level decision making being carried out among management. This tends to be strategic and will cover the supply chain details that impact right across your business, from partnerships you make to where manufacturing sites are located. This is also where the decisions are taken to focus on measures that are most likely to result in cost benefits for the business, for example establishing a buying strategy, implementing best practice and identifying new opportunities to reduce costs associated with inventory storage and transport. The other level involved is operational – essentially the day-to-day decisions that will impact how products move along a supply chain, such as organising the warehouse and processing orders. At both of these levels there are two key elements that could have a significant impact on how optimised supply chain management really is.
- The use of technology. Today, it’s almost impossible to operate a truly optimised approach to supply chain management without using technology. Integrating technology provides a wealth of opportunities for more efficiency, greater transparency and identifying problem areas within the business that can be resolved to increase performance. For many organisations this has meant investing in Enterprise Resource Planning (ERP) software. The reach of this software usually extends right along the supply chain, from sourcing materials to sales and invoicing. This perspective, and the tools that ERP software provides have become increasingly essential to effective supply chain management.
- Implementing technology. This second element is often overlooked when it comes to making decisions that are designed to improve optimisation of supply chain management. However, it’s essential to also plan for the time and resources that are likely to be necessary to integrate technology effectively. That often begins by ensuring that there is buy in throughout the business and especially at management level. Training may be required enterprise-wide. Crucial to this phase is ensuring that you’ve chosen an ERP solution that is appropriate for your business. Your revenue and the size of operations should be determining factors in identifying the best option at the right price.
There are many different ways to optimise supply chain management but the most fundamental change often comes from tech investment. This can be a transformative process for any business as long as it’s supported by the right decision making and time and resources are dedicated to making that investment work.