5 Tips for Efficient Supply Chain Management
Supply Chain Management (SCM) involves the flow of goods and services in an efficient manner. It encompasses all the steps involved in procuring raw materials through to the finished goods, in a way that is streamlined and provides value to the customer.
As any successful business owner will tell you, SCM is an extremely crucial part of operations. It establishes strong communication and relationships with suppliers, helping to avoid shipment delays and minimize logistical errors.
Efficient SCM gives you better negotiating power to get the best rates and products in the shortest time possible. In turn, this reduces inventory costs and improves the overall planning and efficiency of your operations.
All of the above ensures your business can deliver a high level of customer service, and in turn deliver dramatic financial success.
Clearly staying on top of your SCM is crucial, but sometimes it’s quite difficult. So, to help you out, we’ve put together a list of five key tips to help you stay on top of things.
1. Find Dependable Suppliers
One cannot emphasize enough the importance of finding the right suppliers.
While choosing suppliers, the cost is not the only factor. What’s more important is to select suppliers who are reliable. This allows you to fulfill your responsibility in delivering the best quality to your customer.
It is important to do thorough research to identify those who have a strong reputation for maintaining high standards for quality, customer-care, packaging and practice ethical ways of doing business.
2. Invest in Employee Development
Any SCM worker will vouch for the fact that operating an efficient and streamlined SCM is like running an obstacle course on a daily basis. The dawn of each new day brings its own set of problems to be solved, especially with expensive, fragile or perishable goods.
Staff development strategies involve not only a formal training curriculum, but also on-the-job training, coaching, mentoring, rotation through multiple assignments and training based on scenario modeling. All of this helps employees to understand not just how processes work, but also the impact of them on the business.
3. Continuous Improvement
Having established a stable SCM is not the end of the road. An integral part of having an effective SCM is to keep monitoring and evaluating all the time.
Constantly looking for ways to improve and innovate ensures in accruing more significant cost benefits, increases speed to market and deliver the highest standards of customer service. In a constantly changing world, continuous improvements need to be constant.
Never stop looking to find ways to improve!
4. Leverage New Technologies
The technology that exists today plays a huge role in strengthening SCM. For example, implementing a good Warehouse Management System (WMS) is what helps successful companies to streamline their SCM.
WMS makes it easy to track, document and evaluate the effectiveness of your SCM over time. It strengthens data collection and provides valuable insights through data analytics.
Companies that wish to achieve a high level of SCM should also consider investing in transport management software. The use of computerized shipping and tracking systems helps to integrate all operations from one panel.
Moreover, it is possible to have such a panel in your mobile device meaning you can organize your inventory data, manage shipping, monitor distribution, etc – all in the comfort of your office or while on the go.
Technology enables companies to eliminate laborious manual intervention and speeds up decision-making. Arguably, technology-driven SCMs play a large part in helping companies to gain competitive advantage.
5. Improve Returns Management
A solid SCM strategy has an efficient returns management system, as it is equally important to give returns as much attention as shipping out stock.
A solid returns management enables you to efficiently re-process or re-manufacture, as the case may be, in order to service customers quickly and efficiently.
The first thing you should do is track everything. One damaged sweater seems minor, but ten damaged sweaters in two days can flag an entire shipment of damaged sweaters! Little things can help you discover big problems.
As mentioned above, modern technology can play a huge role in great SCM. Avail of the best software you can find, and make sure it integrates with existing systems. To do its job, returns prevention software needs to access key data stores within your business. Make sure its API enables tight integration with your merchandising and warehouse management software.
Do not underestimate the value of a robust returns management process. It goes deeper than helping your company run more efficiently. It can have a huge impact on customer perception and trust in the brand, the company, and its products.
A satisfactory product return experience can lead to increases in a customer’s future purchases and referrals and, in turn, the profit they yield for the company.