Effective supply chain management is crucial to a business’s success. Creating a supply chain management strategy will give your business a competitive advantage.
Improving supply chain management will save businesses money and reduce product time in queues, leading to increased customer satisfaction. A lean supply chain will give you more control over your business. Below we’ve listed five vital tips for logistics and supply chain management that you can’t afford to miss.
Keep reading to learn more.
1. Evaluate Suppliers
When choosing suppliers you should always think if they will be to meet your future needs. A supplier is in a relationship with your business. The longer you work together, the easier communication will become and you’re likely to get better pricing.
That being said, some suppliers aren’t built to scale. As your business grows, the suppliers you start with might not be able to meet your demand anymore. You can’t divorce your company, but you can leave a supplier who is unable to perform at any time.
2. Analyze to Optimize
Your supply chain is a dynamic business component. Just as you’ll evaluate your suppliers, you also need to evaluate the entire chain. There are generally players that can ultimately be eliminated from your supply chain altogether.
Other times you might find you need to add a process to your supply chain to make things move faster.
There are various key performance indicators(KPIs), that you can analyze to optimize. These include fulfillment accuracy, customer order cycle, inventory velocity, and unit freight costs.
3. Technology Updates
Supply chain management software is continually evolving. Successful businesses must be innovative, and this even means with their supply chain management. If you don’t already have a supply chain or inventory management platform, now is the time to install one.
By installing a technology platform to manage your supply chain you can avoid information silos and save your business thousands of dollars wasted on miscommunication.
4. Evaluate Returns
The return rate for online orders is 30%. Customers are more likely to make a purchase when there is free shipping and free returns. Making the returns process easy is just as important as making the ordering process easy.
Many companies lose money to inefficient returns. Evaluate your inbound logistics and create a simplified return portal for customers.
Sometimes there are too many hands in the pot. When looking for suppliers, some of them offer a “one-stop-shop.” They house all the services you might need under one roof. The players in your supply chain will depend on your industry and what factors you choose to outsource.
When choosing suppliers, think about things like their geographic location, order quantity, lead time, and employee count. All of these factors will affect the speed at which a product goes from raw materials into the consumer’s hands.
Supply Chain Management Success
The five steps above should be the foundation of your supply chain management strategy. Make sure to omit any players that waste time or money. A supply chain encompasses every part of your business.
Contact us to make sure you are doing everything to maximize success!