13 Ways to Improve Your Supply Chain Management
Updated · Oct 21, 2011
Whether you are looking for help in choosing the right supply chain management solution or advice on how to make your supply chain work more efficiently, the following tips, from supply chain management experts and managers, can help.
Get rid of spreadsheets
Too many enterprises still “plan their purchasing using slow and unreliable spreadsheets,” said Jason Averill, executive vice president at Avercast. To make sure you are using the most up-to-date, accurate information, “move up to an affordable supply chain platform.”
Identify innovation partners
Supply chain managers must determine which of their suppliers possess capabilities they can tap into to help produce innovations in products, services or go-to-market strategies, said Chris Sawchuk, principal at The Hackett Group and practice leader of the firm’s Global Procurement Advisory. The procurement organization should play a key role, he advised, by “becoming less of a process executioner and more of a process enabler” and looking for opportunities to improve current processes by leveraging supplier capabilities.
Segment your supply base
To identify the right partners, segmentation of suppliers must become a “foundational” skill, Sawchuk said. “You must be able to slice and dice the supply base in many different ways in terms of enabling innovation,” he said. “Most organizations have a single, traditional way to segment their suppliers, but they need to be able to segment them in many different ways, around lots of different criteria.”
Select supply chain software tailored for your industry
“There are hundreds of off-the-shelf supply chain software packages or component modules on the market today, and most implementations end up requiring some level of customization and integration with other systems,” said John Freund, CEO of JumpTech. “Do your homework and start your research with systems that were designed for companies in your industry, or that are similar to yours in some key aspect. Odds are your project will end up in the ‘better, cheaper, faster’ category that way, and you’ll likely get a number of handy system features you won’t get if you venture too far afield from your space.”
Establish supply chain metrics
“Despite decades of encouragement and hundreds of millions of dollars dumped into information technology, most companies still don’t have their supply chain metrics under control,” said Joe Francis, executive director of Supply Chain Council. “Enterprise-wide balanced scorecards, cascading supply chain metrics and management dashboards can provide timely insights that help supply chain managers react to disruptions — and opportunities — in today’s volatile markets.” Francis recommends starting with metrics that can be benchmarked internally and externally, such as cash-to-cash cycle time, return on working capital, perfect order fulfillment and agility indicators.
Manage information, not information management
“Enterprise solutions should facilitate proper collection, identification and easy access to allow for rapid decisions,” said Shawn Casemore, founder of Casemore & Co. and an expert on supply chain and operational excellence. “Collecting information that is not relevant, and serves only to meet the criteria of an enterprise solution, is not the way to efficiently manage a business. Collect the information that is more relevant and aligns with business objectives. Then ensure information is easily accessible.”
Involve your employees
“Give [employees] visibility into how they impact the customer,” suggested Mike Ledyard, partner at Supply Chain Visions. “Create a metrics program that links shop floor level metrics to customer needs and corporate objectives.”
Integrate sales, operations and finance
“Integrate what Sales plans to sell, what Operations plans to make and what Finance has forecast into a single consensus driven plan,” advised Ledyard. “Sales and Operations Planning (S&OP) provides the optimal balance between customer demand, production capacities and corporate financial performance.”
Consider a single supply chain solution
“Instead of looking for the least expensive option and having different solutions for different locations, I recommend [having] one enterprise solution that can support you everywhere you do business, even if it means that you have to pay more,” said Lenny Kharitonov, president of Unlimited Furniture Group, Inc.
Monitor performance of all supply chain partners
“The failure of a key supplier can be disruptive and ultimately impact revenue,” said Alex Cote, vice president of marketing at Cortera. “You want to be constantly monitoring your suppliers so you don’t get caught off guard.” To keep on top of your supplier network, “have a system in place to measure, improve and, if necessary, replace partners,” said Kharitonov.
Implement tracking and mobile technologies
“To improve efficiencies and minimize costs and inaccuracies, take advantage of technology such as RFID, voice picking, mobility, warehouse automation systems and warehouse management systems,” said Kevin Beasley, CIO of VAI.
Analyze information to meet customer needs
“Many believe that the supply chain starts at the warehouse and ends when products have been delivered to stores,” said Brendan Lowe, president of USA business at Aldata. “This simply isn’t true and is symptomatic of the ‘delivery’ mindset that unenlightened retailers have. More important than ensuring products are stocked on the shelves is that those products are [considered] desirable by your customers.” So be sure to track which products your customers actually want and which ones they don’t as part of your supply chain management strategy.
Integrate marketing expenditures into supply chain planning
“Include marketing expenditures, which include costs, resource limits and anticipated demand impact of proposed marketing initiatives, into your supply chain plan to maximize corporate profitability,” said Jeff Karrenbauer, president of INSIGHT, Inc. “By doing this, companies [can] identify which marketing campaigns should be implemented and which should be avoided, the optimal target customers, channels and products for each campaign and the corresponding optimal procurement, manufacturing and distribution requirements, all in light of supply chain costs, capacities, service requirements and the max profit objective.”
Jennifer Lonoff Schiff is a regular contributor to Enterprise Apps Today and runs a marketing communications firm focused on helping small and mid-sized businesses.