May 2012 | Sponsored | Knowledge Base

Proper Care and Nurturing of a Supply Chain

Tags: Supply Chain Management

Wendy Buxton is President, LynnCo Supply Chain Solutions, Inc., 866-872-3264

Supply chain can be complicated, but managing it effectively doesn't have to be. Creating a superior supply chain is like parenting a baby through adulthood. It requires continual focus, monitoring, and care. Taking your eyes off your baby can be costly! But with proper care and nurturing, you can grow something that performs beautifully—even in the midst of today's ever-changing business environment.

Here are three critical steps to growing a superior supply chain:

STEP 1. From Crawling to Walking: Commitment to Growth

No one was born walking. So when it's time to transition from crawling to walking, a little extra help may be necessary. It's the same concept when moving from traditional freight management models to dynamic supply chain capabilities.

There are a couple of options to consider once you commit to maturing your supply chain beyond traditional freight management: You can build a supply chain strategy team internally or you can outsource it to a third party logistics company (3PL). Building an internal team requires a high level of hands-on supervision, internal systems development, and a capital commitment. If building an internal supply chain organization is not for you, perhaps you are better suited for working with a 3PL. A 3PL relationship can be more cost and time effective to implement. Plus many 3PLs offer already standardized best practices and technology tools, which means you don't have to invest to create these internally.

No matter what decision you make, growth of business in today's economic environment requires a commitment to dynamic supply chain optimization. Dynamic optimization eliminates the "set it and forget it" mentality of static order thresholds and load plans that age quickly, becoming less aligned with business needs over time. Be prepared to implement new technology tools, develop and enforce rigorous standard operating procedures, set and monitor measurable objectives, and expect continuous improvement day in and day out. What was optimal last week is likely not optimal this week. It may sound like a lot to take on, but really, the hardest part is often taking that first step in the right direction.

STEP 2. Keep Your Eyes on Baby | Stellar Monitoring Means Stellar Performance

No one would leave a baby in a high chair with a full bowl of chocolate pudding unless you want a mess on your hands (and the floor, the walls, the ceiling)! In the same way, you can't take your eyes off your supply chain and expect good results. But let's be honest: you can't see all things all the time. You need tools and methodologies to help continually analyze ways to optimize your supply chain. You must have the ability to correlate order lead times, transit times, load utilization, delivery time and costs as business needs change from day to day. You must be able to translate data into intelligence that drives a daily supply chain plan. To do this manually could take weeks or longer! For example, consider that LynnCo's Optimizer tool makes millions of calculations in minutes. The engineered supply chain plan is then matched against business requirements and adjusted to the reality of the business. This is an incredible undertaking without the proper tools and expertise.

STEP 3. One Big Happy Family | Knowledgeable Resource Partners

For a family to function well and be happy, each member needs to know their role and do their part. In the same way, a well-established relationship between your company and all supply chain parties is the key to a smooth running, optimized supply chain. To establish and govern these relationships, make sure to communicate goals and expectations required of your team. Measure them, optimize them, and re-measure them, creating a collaborative team culture that focuses on doing it great today and even better tomorrow. For this reason, it is important that you have the right members on your team. You may not be able to choose your family members (don't we wish!) but you can assemble the highest caliber logistics partners that bring the greatest levels of expertise and resources. Starting off with the best partners and team members will save yourself headaches and lost opportunities in the future.

One last caution: Working with your supply chain is like buying shoes for a teenager: You can't expect that what fit yesterday will still fit tomorrow. With time comes change, so be ready to adapt! Be prepared to optimize continual change with patience and persistence. It doesn't happen overnight, but in the long run, your results will be astounding.