The supply chain is the network that connects a company and its supplier to their customers – simple! However, the bigger the company, the more activities, people, entities, information, and resources are involved. This can make supply chains complicated, although alternatively, local businesses will have less complex networks. Optimising the supply chain will lead to lower costs and improved production cycle speeds, so all businesses should look to identify weak points in their supply chain – here are three key areas to consider when looking to improve your supply chain.
The term visibility (in the supply chain) is the ability to track parts, components, or products in transit from the manufacturer to their final destination. Poor visibility can have serious consequences for businesses. Primarily, it leads to isolated teams and disparate management systems, as well as poor communication between stakeholders throughout the supply chain, which affects their productivity. Additionally, it may lead to unauthorised subcontracting and/or obtaining raw materials. The above issues mean that businesses with poor visibility will struggle to maintain consistent product quality, abide by legal requirements, and guarantee ethical business practices.
The best way to improve visibility across the supply chain is by identifying the places that have the greatest financial impact on the business, and using technology such as e-bate. This is because full contract visibility can be achieved through e-bate’s centralised contract repository, meaning that buyers and suppliers can communicate, monitor, and negotiate in real-time. The reporting suite further improves visibility.
The more complex the supply chain, the more difficult it is for companies to make individuals along the supply chain accountable should anything go wrong, such as disruptions and late deliveries. The first port-of-call is to be prepared for out-of-the-ordinary disruptions, especially given the current climate. This means looking past labour disputes and mechanical/technological failures but considering geopolitical changes and communication disturbances. Opening a dialogue with members of your supply chain regarding these issues is the best way of preparing for said issues. Next, clearly laying out what each stakeholder’s plan of action is will give underperforming individuals no place to hide, should they agree to the terms set out. Finally, the account manager will have the tools needed to handle any disruption if suppliers, logistics providers, and even insurance companies are included in the development of procedures and reactions.
3. Reactive Vs Proactive
Reflection is vital when analysing performance but resting on your laurels is an easy mistake to make. One moment operations will be going swimmingly, then suddenly a change in circumstances at one stage of the supply chain can disrupt other stakeholders. Companies need to be proactive when preparing for unexpected changes, reducing the impact of factors out of their control. Here are some ways of mitigating supply chain issues:
Introduce technology that can present data in real-time – this will facilitate the best planning in an ever-changing market.
Continuously renew goals and targets that are appropriate in the here and now.
Introduce ongoing communication along the supply chain to find new ways to improve processes.
Build in redundancy to help systems respond to unanticipated events.
Addressing weak points in the supply chain requires hard work and financial investment, but preparing for change can transform threats and weaknesses into opportunities for growth and gains.
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