Trying to find a single factor that makes one company successful would be hard since the forces shaping the fate of a business are too numerous to count. However, we can all agree that efficiency makes the top of this list. And we are not talking about the production. In order to meet its purpose, the product needs to go through a supply chain and reach its end-user.
This fact casts an entirely new light on the importance of this often-overlooked business facet. Let us take a look then at a couple of effective tips that should help you to optimize your supply chain and avoid dangerous bottlenecks that can cripple your revenue flow.
Improve your company’s inventory management
Efficient supply chain management starts at the warehouses so if you feel your company is facing supply chain challenges this is the area where you should start the overhaul. But, how can you make inventory management more refined? Start by setting up the relevant KPIs and conducting monthly analyses of your warehouses. Also, you can implement the ABC methodology. Divide your inventory into groups based on their value (A, B, and C) and let the management focus its attention and resources on the products that drive the strongest revenue.
Outsource important supply chain activities
To put it simply, keeping too many things under your direct supervision gives you more things to handle and develop in-house. This situation creates overbearing and clunky systems that are hard to reform and seldom reach the optimal level of efficiency. Try then to keep the supply chain compartmentalized and if possible outsource some of its functions like logistics and customer service. The companies that are specialized in these areas will be able to attain a much higher level of efficiency than your company would be able to develop internally.
Reinforce your internal procedures
This is one of the most efficient ways to improve your company’s shipping and procurement operations. To put it simply, an activity as complex as supply management can’t afford random operations. If you want to attain any level of higher operational efficiency you should have a detailed step-by-step guide that will outline procedures for every situation your employees may face and relieve them from the pressure of making business-related decisions. The fewer things are left to interpretation the faster will the whole system work.
Make sure you are not facing cash flow obstacles
Cash flow problems can completely disrupt the supply chain efficiency. The inability to deliver the products to the doors of the end-users, in turn, creates new financial obstacles. That is why you always need to be able to patch up the financial gaps and deliver the next shipment. One of the easiest solutions to this common problem can be found in the low-interest Trade Finance loans that can serve as a quick monetary injection without putting too much financial pressure on your business over an extended period of time.
Use automated management platforms
To put it simply, Artificial Intelligence is much better suited for handling complex sets of data than human beings so they perform these tasks faster and with much lower margin error. Supply chains that are entirely built around complex inventories, route tracking, and meticulous planning make a very good match for this type of technology. Fortunately, the market is already filled with fully developed logistics and supply chain management systems so you only need to find the best match for the profile and the scale of your company.
Find new ways to improve transportation
According to some estimates, transportation creates as much as 70% of all logistics costs. If you decide to maintain your own fleet, you will need to find a way to reduce these overheads. You can meet these goals by introducing GPS tracking, investing more resources into maintenance, providing the drivers with comprehensive training, improving routing with AI-powered management platforms, and introducing flexible scheduling. Only well-rested and satisfied drivers are able to work at the peak of their performance.
Improve returns management
Last but not least, we have already briefly mentioned the importance of the supply chain for business success. This relevance makes keeping track of and improving returns management even more critical. Do your best then to pinpoint common product return patterns and use this data to minimize customer churn and eliminate supply chain shortcomings. Having a clear return policy that will be communicated to your customers and trying to process ecommerce returns more quickly will help you to find mutual ground with some more demanding customer profiles.
We hope these few tips will help you get a general outlook of the ways you can improve the supply chain of your company. One business is only as profitable as it’s able to deliver its product to the doors of its end users. If the company is facing issues at this instance all other departments will experience problems as well. Do your best then to use the strategies we gave you to overhaul the way you tackle this duty. The room for mistakes is only going to narrow down as time goes by.
About the Guest Author:
Derek Lotts is an experienced freelance writer and blogger. His main areas of interest are small business, home improvement, and sustainable living. He strongly believes in the power of sharing knowledge and ideas through the mediums of modern technology.