Setting Up Your Supply Chain Strategy

When you are part of a supply chain or are in charge of managing one, it is important to have an effective supply chain strategy by which you perform all transactions between each link in the chain. What are the important aspects of the supply chain strategy that you should consider in putting together a control system?

Who are all the parties?

In any supply chain, you’ll have several links, all of whom must be satisfied with the outcome of their own individual transactions. None of them are concerned with what happened prior to their link in the chain, and none care nearly as much about the transactions that take place later down the line, as long as clients are happy. Therefore, it is your job to know who is being dealt with at which stage of the game, and you have to be certain that all are content with the proceedings. That includes the manufacturer, the supply house, the representatives, the distributors, the transportation agents, and the end users.

What is the time frame for completion?

Of course, your supply chain strategy has to have a time management card in the deck. Everyone at each stage wants prompt service, and this usually means that they need their supplies “yesterday”. It is your job to route out a strategy that delivers everything in a timely, fast, efficient manner while maintaining quality of products and services. Building a precise schedule that all parties adhere to is essential in creating a regimental process that doesn’t crack under pressure. In order for that to succeed, however, your tightly planned schedule must also have a small amount of wiggle room for extenuating circumstances.

Packaging, labeling, and shipment must be accurate.

There are several areas in which delivery could go wrong, causing problems with the next link in the chain. All product labeling and packaging must be clear and concise, and the process of creating these packages and labels must be carefully adhered to in order to assure that there are no mislabels or improper packaging leading to the shipment of the wrong product to the wrong source. Computerization of this process will eliminate some danger, but human error can always occur. It is best to have a process in place of double- and triple-checking each item that is being shipped to reassure that nothing is incorrect.

Tracking the flow of supplies down the chain is vital.

Only tracking the products to find out if your scheduling requirements are being met and all links in the chain are satisfied with their service will tell you if your supply chain strategy has been successful. Getting feedback from all sources from the top of the chain to the bottom will assist you in knowing where adjustments must be made to increase efficiency and time management. It will also help you to identify which suppliers are the most proficient in meeting your delivery needs and time constraints so that you can narrow down the number of people with which you must consult in order to keep the flow of supplies moving swiftly.

By the Dictionary: The Definition of Supply Chain Management

Supply chain management by definition involves the entire supply chain, from the supplier out to the manufacturer, followed by the use of the retailer and then the final customer. In order to be efficient in supply chain management, you must meet three primary goals involving levels of inventory, speed of the transaction, and efficiency in sales. We’ll look at how you can achieve success in each of these areas separately.

Reduction of Inventory

While it is necessary to keep a certain amount of product on hand to satisfy the needs of customers, both commercial and consumer, you need to maintain a balanced view of how much is too much. If you have a lot of extra bulk in your inventory, you run several risks. First of all, it cuts into your net worth, showing as excess stock that is not moving. Also, large quantities of stock mean that some of it could become outdated or even expire, if any of it is perishable. Keeping the minimum amount of stock necessary increases your bottom line and reduces waste. It also allows you to provide a greater number of products and respond more quickly, aiding in meeting the next goal of good supply chain management.

Speed of Transaction

In supply chain management, you must be concerned with response time to all customers within the chain. Keeping a smaller amount of inventory will allow you the ability to more carefully monitor the stock, providing you with the ability to more quickly search and find what is needed for a customer. This enables you to exchange data with each customer along the line in real time, getting them the answers they need immediately. Another way to assure that you can respond quickly to requests is to use an inventory management system that helps you keep a tight watch on the coming and going of items in your warehouse. You can quickly index the answers required straight from the system and guarantee that you are providing the customer with the proper feedback. Once you can get the information to the customer with ease, you should consider what they need in return, bringing us to the final goal of effective supply chain management.

Sales Efficiency

The best way to assure that you can make the most of every sale with each customer or client in your supply chain is to effectively meet the needs of these customers. After you provide them with quick, accurate information, listen to what they require and find a way to implement changes that make your speedy response and tightly controlled inventory more efficient for their needs. Perhaps there is a specific product they need to order in certain quantities on a regular basis; in this case, you can ease their concerns by setting up automatic shipments of such items.

Most importantly, in depth knowledge of your inventory and the needs of your customers will help you in implementing effective supply chain management. The key to success is catering to the needs of all sources along the way, including yourself.

Familiarizing Yourself With Supply Chain Logistics

Whereas supply chain management is concerned with the effectiveness of supplying product to customers down the line from the original production, supply chain logistics starts much sooner in the process. In order to be effective in managing your supply chain, you may want to familiarize yourself with the aspects of supply chain logistics as well.

Logistics management involves the planning and implementation of a marketing scheme, as well as the flow and storage of goods throughout the entire supplier process. Sourcing and procurement are part of the logistics process, meaning that you must determine from where the inventory and supplies you intend to provide to others are going to come to you. The logistics management process also include the planning and scheduling of any orders, deliveries, shipping, and other transportation needs of the supplies along the chain. Let’s break it down from the beginning.

• Source – Once a source of goods is determined, you must secure a relationship with this supplier. For your part, this usually means being set up as some sort of distributor or representative that will act as a go-between from the source to the next step in the supply chain.
• Fleet – You will need to set up transportation needs for shipment of the goods that you intend to manage within your inventory. This could be provided from several directions. The source may have a means of shipment, your company may have an in-house transportation department, or you could outsource this work to a transportation or delivery company.
• Warehousing – Once you have the goods, supply chain logistics management requires that you have somewhere to put it. This means having sufficient warehouse space and an organized inventory system into which items can be placed. An inventory management software system and proper labeling and bin placement are vital to controlling the flow of the supply chain.
• Order Fulfillment – In order to complete this aspect of supply chain logistics, there are several requirements to keep in mind. You must have a strategy for taking orders, a process by which these orders are pulled and properly packaged for shipment, a plan for delivery, and a means of tracking the outgoing product so that you can replenish stock as necessary.
• Coordination – All aspects of the supply chain logistics process must integrate seamlessly, meaning that you must carefully coordinate the processes to make the flow of supplies from one area to the next efficient and smooth. Without careful planning, it is quite easy for one aspect of the chain to fail and several customers to be disappointed.
• Customer Service – This is probably the most important part of supply chain logistics, as it affects every step along the way. Regardless of the stage of the transaction or supply process, every customer that is dealt with wants to receive assistance in the fastest, most efficient way possible, with a willing and smiling individual helping them through their part of the transaction. No matter who you are working with, be certain to provide a pleasant front and always strive to achieve the goals of the customer.