Every business has a supply chain. This is a network of various companies and people working to produce consumer goods and services for the end customer. Though it might seem straightforward, it involves many moving parts that must align to be effective.
Is your logistics system not running as smoothly as you’d like? There are many reasons for this, but the bottom line is that you need to fix it to increase market share and succeed in your industry.
Looking for solutions? Here’s how to improve supply chain efficiency.
Build Relationships
Many individuals, including manufacturers, vendors, warehouses, transportation, distribution, and retailers, ensure that a supply chain works properly. The entire chain relies on this crucial network.
No one can handle every facet of their logistical operation efficiently. That’s why they form partnerships with companies specializing in specific parts of the supply chain. To keep up with everything, a business owner must keep relationships strong.
Communication
Communication is key to avoiding shortages or delays and pivoting so you are not affected. Strong relationships mean building trust and thriving together, which often translates into better terms and prices. Make sure to have robust relationships with multiple players, so you have options for products and shipping methods for your end customer.
Embrace Automation
Automation involves using technology to streamline and enhance your supply chain. This has many benefits, including:
- Freeing up human effort
- Lowering errors
- Increasing volume
- Tracking inefficiencies
- Compiling data
People fear change, and with the advent of AI and automation, they think it will put people out of work. However, it frees people to be more productive in the business, leaving repetitive tasks to machines. The result is a company that can focus its workforce on growing its business. Automation fills in supply chain gaps practically and through the right software.
Look for Better Logistics Delivery Methods
How you get your raw goods and products to your warehouses and then deliver them to your customers can be frustrating. This is because there is so much to consider, and you need dedicated staff to operate it smoothly. Instead of having them do everything, let a logistics company with experience in supply chain operations help you out.
A third party logistics provider is the solution. They offer a full-service system with many contractors and in-house professionals to manage everything. They can take orders from you or your e-commerce platform and ship directly to customers.
Many companies can store all your products and have distribution hubs in major cities to speed up shipments. They even manage returns and restocking to keep your business running smoothly.
With strong inventory management and technology platforms for detailed analytics and real-time reporting, you will always know how your supply chain performs. 3PL providers are the key to business success.
Be Adaptable and Changeable
Change is a natural part of business and can be positive. New companies succeed by innovating and leading the way. To stay relevant, your supply chain needs to be flexible and adaptable. Strong relationships with logistics providers are essential.
Include your in-house team in updates to ensure you deliver great customer service in a competitive market.
How to Know Your Supply Chain is Efficient
Understanding how efficient your supply chain is can be tough. Even with good partners, knowing if you’re on the right path is difficult. So, how do you measure efficiency?
Start with inventory turnover. Check if your inventory sells regularly. Inventory includes raw materials and finished products in your supply chain. You’ll want to know what is sold, used, and replaced.
Next, look at order accuracy. Examine the data to see how accurate your order deliveries are. Aim for high percentages, and share these numbers with your production and delivery teams to improve efficiency.
Finally, consider the service rate. This is crucial because you want to exceed your customers’ expectations. Focus on your on-time delivery rate and how often orders arrive as promised.