Supply Chain Planning
Do you enjoy managing your supply chain? Too many managers answer that question with a clear “no.” It’s true that supply chain management can be stressful, as keeping good flow of your in-and-out inventory can be the difference between turning a profit or taking a loss. But in reality, managers who dread the process often do so because of reasons that can be avoided with the right supply chain planning. So without further ado, here are 7 tips to help you jumpstart your supply chain management.
1) Be Proactive
One of the most common sources of dread within supply chain management stems from the often reactive nature of the process. Especially managers who are not specifically trained in the concept tend to manage their supply chain based on individual needs at a given time, which requires constant updating and carries with it a high degree of unpredictability.
The solution is simple: instead of managing your supply chain on an ad-hoc basis, put a plan in place that outlines the individual needs at different points of the chain. You can ease this process by implementing automated methods of electronic communication between the various members of the supply chain. Recognizing potential problems before they occur can make the difference between a successful process and a source of worry.
For experienced supply chain managers, this first step may seem too obvious to even list as a tip. But smaller businesses may not employ a dedicated supply chain manager. If you’re a part of this group, establishing a supply chain plan is crucial to alleviate stress and aid your success.
2) Remain Flexible
At the same time, beginning the planning process early often results in a rigid protocol and management plan that doesn’t account for potential issues. In this case, running into a problem may throw your entire supply chain out of balance, which is another popular source of stress.
So while your supply chain planning should be done as early as possible and remain proactive, be sure to also include plenty of possibilities for flexibility within that plan. After identifying potential problems, it may be a good idea for you to implement features such as exception-based protocols early in the process – allowing you to get ahead of a problem when it occurs and ease your management needs.
Setting Up alternative plans in an “if-then” fashion can also prove invaluable in creating proactive supply chain plans that still remain flexible.
3) Know Your Goals
Being proactive and flexible is undoubtedly important for you to succeed in supply chain management. But they are worth little if you don’t take the third step: setting specific goals and benchmarks for your plan, so you can adjust if you spot inefficiencies.
As you probably know, the ultimate goal of modern supply chain management is to be as “lean” as possible, which means having as little inventory as possible while still successfully fulfilling all of your forward transactions. But what exactly does that mean for your company? You may require a certain base amount of inventory at all times, to account for bulk orders that come in unpredictably on a regular basis. Or you may have a steady base of customers that order the same amount of product from you every single time, requiring you to store little to no inventory.
For effective supply chain planning, knowing what you need to accomplish is absolutely crucial. Once you know what your goals are, you can begin to reverse-engineer the entire supply chain to set up benchmarks for each step, measured both in time intervals and in quantity amounts. Then, you can use these benchmarks to regularly evaluate just how close you come to hitting your goals, and what you should do to improve the process.
4) Increase Transparency
Of course, a system like we described in the above paragraph is only possible if you have a system in place that allows you to view and adjust every step in your chain. While some businesses spread the responsibilities for their supply chains to different departments to reduce complexity and stress, that’s rarely a good idea.
Instead, the only way to ensure that your supply chain is both strategic and flexible is to manage it within a single department, which can make adjustments as necessary once (or, even better, before) a problem arrives. Related departments may have input into the process, but the end responsibility should be as singular as possible. Such a singularly managed supply chain ensures increased transparency, and ultimately a greater chance for success.
5) Go For Partners, Not Vendors
As part of your supply chain, you will inevitably have to work with other businesses to get the right amount of product at the right time. But too often, we fall into the trap of thinking about these other businesses simply as “vendors,” not partners.
Looking for mere vendors may increase the short-term efficiency and ROI on your supply chain management. But as soon as the inevitable problem arises, you will find them to be difficult to work with. Long-term partners, on the other hand, can help you solve problems as they arise, working with you under a mutual degree of trust that arises out of the close relationship between both of you. While these types of partners may be more expensive in the short term, they will be invaluable over time.
6) Break Rules When Needed
Logistics planning comes with so many rules of thumb and best practices that you should adhere to, it can be difficult to follow them all. In fact, this post is one of them! But true supply chain experts know when to follow and when to break rules. In reality, the ideal supply chain planning process depends in large part on your individual business needs, and can vary wildly based on industry.
So while most the above rules are certainly good guidelines to help jumpstart your supply chain planning and ease your stress, they shouldn’t be regarded as gospel. Regard this as an extension to our second tip about flexibility above: don’t be afraid to break the rules when necessary.
7) Choose the Right Tools
All of the above points are great in theory. But if you’re one of the many supply chain managers still relying on Excel spreadsheets to strategize and execute your plan, they will be almost impossible for implement. So instead of making supply chain planning more difficult for yourself than it should be, why not choose the right tools for your job?
Especially small businesses often shy away from supply chain planning management software because of its cost. But in reality, you should look at this type of software as an investment rather than an expense. By enabling you to be proactive yet flexible, set goals and benchmarks and communicate with your supply chain partners, the right software is instrumental in keeping your supply chain lean and your business from buying unnecessary inventory.
So you think any of the above tips will help ease your supply chain planning, we’d love to help you! Contact us today to learn about the right software solutions for your needs. Not only will you significantly increase your ROI, you’ll also ease your worries so that soon, you can answer the opening question of this blog with an emphatic “Yes!”