Food for thought from the Gartner Supply Chain XPO 2023
Gartner Supply Chain XPO 2023 is one of the largest gatherings of supply chain professionals…
Efficient supply chain management is essential for businesses looking to improve their competitiveness, reduce costs, and enhance customer satisfaction. However, creating effective supply chain plans can be challenging, especially with the increasing complexity of supply chain networks. There are numerous factors to consider, including inventory management, transportation, supplier performance, product design, and sustainability practices. Businesses can create profitable and efficient supply chain plans by making intelligent decisions about these factors.
This blog post will explore how you can create effective supply chain plans that work for the whole business.
Making profitable supply chain decisions involves considering several factors that affect the overall cost and efficiency of the supply chain. Here are eight tips that can help you make intelligent profitable supply chain decisions:
Maintaining an optimum inventory level is critical to avoid stockouts and reduce carrying costs. Use inventory forecasting tools and techniques to accurately estimate demand and plan inventory levels accordingly.
Using technology to automate processes such as order monitoring, inventory management, and shipping plans can improve accuracy, speed up processes, and reduce costs.
Working with suppliers to optimize their processes, reduce lead times, and improve product quality can result in lower costs and better service levels.
Tracking supplier performance and implementing measures to address issues can help maintain service levels and reduce costs.
Analyzing transportation costs, selecting the most cost-effective shipping options, and using a transportation management system (TMS) to optimize routing can reduce transportation costs.
Evaluating product design for manufacturability and ease of supply chain management and sourcing can help reduce costs, reduce inventory at risk, and improve product quality.
Incorporating sustainability practices into your supply chain can reduce costs, positively impact the planet, and improve brand perception.
Continuously monitoring and analyzing your supply chain’s planned performance can help identify areas for improvement. Data analytics and other intelligent tools can help identify opportunities to reduce costs and improve efficiency.
Companies that view their supply chains as a cost will focus on strategies prioritizing cost reduction. However, as businesses differentiate themselves through service propositions in addition to their products, the supply chain becomes a revenue driver and a source of innovation. Elements such as the returns process, delivery flexibility, product availability, and speed of delivery all become part of the supply chain trade-offs. These alternatives become part of the planning process to increase customer satisfaction and fulfillment while increasing profitability.
To create plans that work for the entire business, considering various dimensions, such as cost and revenue, is essential. This enables the consideration of trade-offs between volume and price and the availability of skilled manpower for service proposition. For instance, including promotional plans helps to better understand customer promotions’ impact, leading to more reliable monitoring and historical review.
By taking a holistic approach to supply chain management and considering all the factors that affect the cost and efficiency of the supply chain, you can make intelligent supply chain plans.
How can scenario planning help create profitable supply chain decisions?