There are some statistics around supply chain, credited to the Council of Supply Chain Management Professionals, that states that the costs of business logistics is up to one trillion dollars each year. So it really shows you that the financial health of the economy is based so much around supply chain, and the fact that it needs to run smoothly.
One of the best ways to improve things like your supply chain is making sure that you have some software and correct things in place. So here are some of the ways that you can improve the supply chain of your business, which will help your business to grow, help the profits, reduce costs, and reduce waste.
If you are continually looking at things like inventory levels, then it is going to take up so much time. But there are newer systems to help with supply chain management functionality that feature things like automated purchasing. This will mean that any ERP software that you have in place (Enterprise Resource Planning), can be programmed to automatically place orders with the vendors that you use when the inventory levels start to go below a certain point.
A really critical part of any supply chain strategy is when you are able to preempt the inventory levels. This can take up a lot of time for an individual to do. But if you are able to automate things, then it can make a big difference. Automatic purchasing will help to free up employees so that they can concentrate on other important things that will help the business to keep growing and growing.
If you want to help your supply chain, then you need to think about standardization. It is central to the success of a supply chain strategy. If you have a standardized ERP system in place, then it will help to increase supply chain efficiency, all while helping you to save some time and money. Another big benefit of this is that employees will be able to share a standardized system of tools. This will then help to increase accuracy in your supply chain, encourage some teamwork, and help to reduce the risk of any miscommunication.
There are often some mistakes that can happen, and even things like fraud can be part of supply chain problems. But if you are taking charge with things and having the right software in place, then it can be something that can be avoided. One of the main problems with inventory management is all about marrying up the software numbers when having a physical count of the inventory.
There are plenty of products or units of inventory that can easily be forgotten about, or have simply disappeared or been stolen. If you look to increase the internal supply chain management, then more transparency is pretty critical, in order to be able to reduce any unexplained inventory, and explain any financial losses as well.
Improve Returns Management
All supply chain management strategies need to have a returns system as part of the management system. Manufacturers need to be able to effectively handle any returns to the business, in order to be able to quickly process the return, or re-manufacture any of the new and returned products. Understandably there are many manufactures who want to focus on moving onto new products and getting them out on the door. But when this happens, often it can fail to get returns the time that they deserve. You want to get it done smoothly, in order to help the process. If you are better able to manage returns, then it will help to reduce waste, as well as help to identify if there are any consistent problems with the same products, for example.
Raise Cost Awareness
There are quite a few uncontrollable factors and variables that come with supply chain management. As a result, it means that there could be different managers along the supply chain. This can mean that they aren’t aware of each other’s challenges, budgets, and routines. But if you have a centralized point for things like rotas or financial information, then it can help to show everyone where things are exactly (especially when it comes to the budget). Doing this kind of thing will help to encourage some cost related communication between the teams, and approach new strategies that can help with consolidating expenses and going on to streamline some of the processes within the supply chain.
Speaking of streamlining things, your business accounting could also be streamlined better, in order to be more efficient. Enterprise resource planning software and systems are often integrated with a variety of different business areas, like finance, HR, and as mentioned, accounting. With some resource planning, it will help to reduce excessive paperwork and some invoice mix-ups. As well as this, enterprise resource planning systems are integrated with other electronic data, and things like fund transfers, which will help to drastically reduce the payment processing, as well as waiting times, and other admin related to accounting.
Gain Data Insight
Decision making for your supply chain strategy will depend on having some accurate and timely data, as well as relevant information. If you are able to have some real-time reports that are available throughout the day, then it will help to provide some really valuable insight into the supply chain health of how you manufacture different processes. The right kind of software can allow both users and people in management, in order to be able to instantly access some of the inventory, purchasing and the production data, which is really important to make as part of the decision-making purposes.
Improve your distribution network
The distribution network of your business is the hinge in the works that will help you to build around it. The distribution will impact all of everything to help to deliver tracking to sales strategy. One of the main goals is to help to improve your distribution network, which you can approach in a variety of ways. You could look at this through a holistic approach or even with a cluster view of things. If you want to take a holistic approach to it, then you need to review some of the essential aspects that are in your distribution network. From there you can try to work out how all of the parts work in sync.
As an example, you could look at the purchasing software that you have, and see how it works alongside your delivery system. Does it do what you need to in terms of communication? If it is not as efficient as you want it to be, then you can then spot where some changes need to be made. If you’d prefer the cluster approach, then it would be all about group charts, graphs, and having some other details that will help you to keep an eye on the process that you are looking at in supply chain.
Devise a distribution strategy
Having a distribution strategy is a really important part of having an effective framework for supplier management. It means that you have a business that has a better idea of what it takes to help to make things like delivery times with your transport company much shorter, reduce waste, and improve some good customer service.
Supply chain management can help a business to work towards some long-term financial stability. When you want to put together your distribution strategy, and keep an eye on it all, then aspects like warehouses, production, facilities, and customers need to all be kept an eye on.
What can be a good idea to do can be to set an overall goal for what you want the distribution to look like, and set goals for implementing some tactics that are going to be in sync with the overall strategy for the business. As an example, if you want your business to receive an award for good and timely delivery, and have customers that want to keep you coming and going, then you need all key stakeholders in your business and supply chain, to know the best ways to improve processes.
Monitor cash flow
Monitoring cash flow in business is vital. It is a really fundamental thing that can help your business to thrive, not just survive. In fact, there is research out there that has found that 90% of businesses fail due to bad cash flow. If you can’t pay people, then the business can’t carry on. When it comes to supply chain, it is another vital aspect. It is so important to track payment terms and conditions with the people that are in the supply chain.
This will help to give you an efficient plan and helping you to budget. If everyone knows that they owe, then it will make a big difference. The companies that you work with, from warehouse to manufacturing and logistics, all need to know and understand how to pay, and how often, and so on. Payment technology, when talking in the context of supplier management, is all about using the equipment that you work with to pay vendor bills, a bit like some point-of-sale machinery, for instance.