Building a supply chain that fits your company’s financial blueprint should be a top priority. Study after study has demonstrated that overall results improve when this is the case. Crafting the right supply chain strategy is not simple, however. It requires a lot of work and a lot of cooperation from different departments.
To help understand just how crucial your supply chain network design is to your business’ success, let’s take a look at some data points on the supply chain, courtesy of Logistics Bureau.
- In 2014, nearly 80 percent of companies with supply chains considered “high-performing” achieved above-average revenue growth in their industries.
- On the other hand, only eight percent of companies with “less capable” supply chains enjoyed above-average revenue.
- Poor supply chain management can lead to disastrous results, generating as much as 90 percent of overall business costs.
- A report on corporate insolvencies illustrates why: In 2012, 44 percent of companies in Australia failed because of subpart strategic management.
The numbers make it clear: Your supply chain strategy can make or break your business.
This strategy requires three levels of planning. First is operational planning, which involves the day-to-day work. The second is tactical planning, which deals with your short-term outlook. Last is your strategic planning, which focuses on your long-term approach.
To make sure your company is in the best position possible to success here are six ways you can design an effective supply chain strategy.
- Make Sure Supply Chain is Aligned with Business Goals
What is your company offering? How do you plan on offering it? Where are you distributing it, and what do you consider successful numbers?
When you answer these questions, the responses should be considered when developing your supply chain network design. This integrated business plan will lead to better decision-making, more collaboration, and improved results. Regardless of industry, cooperation amongst different sections of your organization is key to your supply chain strategy.
- Keep Tabs on Important KPIs
There are a lot of key performance indicators you should monitor when it comes to your supply chain. Here are some you should pay close attention to at all times.
- Order Status: Understanding how your orders are being processed can give you some fascinating data. What percentage of your orders get shipped on time? At what rate are they delayed, backordered, or on hold? If the numbers are not acceptable, you can create clear goals to enhance your supply chain.
- Inventory Accuracy: This KPI looks at how close your inventory is to the information in your database. It requires a lot of work—your team needs to perform a headcount of all products in inventory—but can help you avoid some critical mistakes.
- Rate of Return: Measuring what percentage of products are being shipped back, and the reasons why they are being returned, can help you solve a bevy of problems throughout the supply chain.
- Embrace Environmental Sustainability
Throughout the world, people are making it a priority to be environmentally conscious. And businesses are under increased pressure to adopt sustainable practices. As they should be: Science regarding climate change and man-made waste is undeniable, and we all need to do our part to help our planet’s future.
There are several reasons why you should build a sustainable supply chain strategy. Many customers like to support green businesses, for one, and lots of prospective employees tend to feel more attracted to jobs where they can practice sustainability. Additionally, governments are urging companies to reduce their carbon footprints, and regulations should only get stricter as time wears on.
As the team at Accenture points out, environmentally-friendly practices are simply good for business. Embracing them can cut costs significantly, help you manage risks better, and create new sources of revenue.
According to the Carbon Disclosure Project, an independent non-profit, nearly 40 percent of the companies surveyed reported that they have seen financial savings by reducing emissions activities. Around 33 percent found new, sustainable revenue streams to be beneficial and saved money by cutting carbon emissions.
It is also worth noting that a lot of people are unwilling to work with those who aren’t being sustainable. Almost 40 percent of CDP supply chain project members said they would no longer do business with suppliers that don’t embrace environmentally-friendly practices.
Recently, the Antwerp Gateway in Belgium implemented QLess to manage its flow of trucks to and from the port. The amazing results speak for themselves: improved productivity, time saved for truck drivers, and 730,000 kg of CO2 prevented from entering the atmosphere each year.
So if your supply chain is not green, it may be time to change that.
- Constantly Evaluate Supply Chain Strategy
Technology is rapidly changing, and many practices that were effective a few years have become less successful. Some are no longer viable at all.
As such, it is important to regularly evaluate your supply chain to make sure it is doing what it is supposed to do. If you are not making constant adjustments, you are probably falling behind your competition.
- Staff Your Team the Right Way
With so many moving parts, it can be hard to make sure everyone involved in your supply chain is the right person for the job and performing all the right tasks. Nonetheless, it is important to put a lot of thought into this and to make sure those in charge are building a hierarchy conducive to success. Otherwise, your supply chain strategy is going to fall short.
“Whatever structure you adopt, correctly staffing the supply chain organization is vital to success,” according to Bob Engel of Supply Chain Quarterly.
Engel added that the hierarchy should be led by a “governing supply chain council” comprising the leader of the supply chain, corporate executives, unit managers, and a collection of other leaders throughout the company who are deemed influential.
The council, per Engel, can get rid of barriers to success by making sure all levels of the supply chain are operating as efficiently as possible. Altering your supply chain network design to include a governing council can also promote collaboration amongst those who do not normally work together.
- Implement QLess for Logistics
If you are looking to expedite your operations, reduce costs, and save millions of dollars, you have come to the right place. With QLess’ queue management system for logistics companies, you can set your business on the right course by streamlining workflow.
Time is money, and logistical procedures that are outdated, disorganized, and filled with bottlenecks can cost you significant amounts of revenue. Moreover, when workers deal with delays, it can hurt morale and productivity. Regardless of what tasks they are expected to carry out, employees who have to constantly wait in lines will feel aggravated.
Their cloud-based solution creates a virtual queue, one that is tailored to your industry. This allows you to set up a systematic approach to your scheduling and large scale processes, including equipment transportation and manufacturing operations. This improves your supply chain strategy, communication, productivity, and profitability.
The queue management system works by sending timely updates and notifications to let your workers know when they are moving to the front of the line. This gets rid of long processing times, keeps logistics running at a smooth pace, and helps everyone get more out of their time.
As long as your employees have mobile phones, we can make sure your work documents and instructions are delivered right to the site where the work will be accomplished. They can also receive updates and changes in schedules, orders, or specifications. These messages are delivered via text and voice alerts, making sure production and deliveries already in progress are not disrupted.
This system includes in-depth analytics, which can provide key insights into your supply chain network design, as well as real-time information from multiple workstations and vehicles, allowing you to schedule expedient maintenance.
To learn to receive a business demo and see how it can improve your supply chain strategy, click here. And if you have any questions, feel free to reach out through their contact page.