Why Your Business Needs a Supply Chain Strategy
The progressive profitability of your company and predictive trend of your business’s growth relies heavily on the optimization of your supply chain. Within the management of your supply chain, comes strategic planning.
Your business needs s supply chain strategy for a multitude of reasons. Without a comprehensive plan in place, a business misses out on the procedural implementation of key metrics and goal support, historical data analysis for future growth indicators, customer service adaptation, thorough inventory management, and operational adoption of innovative technologies.
Oftentimes, the difference between outperforming your competitors comes down to the streamlined efficiency of your supply chain. Businesses don’t compete, supply chains do. Integrating processes and collaborating with knowledgeable international transportation management experts will allow for the best possible product manufactured with the best possible profit margin, thus driving business growth.
An optimized strategy set in place to restructure a supply chain will be one that collectively integrates company goals, customer service, and has the wherewithal to operate utilizing current resources – never overreaching in any one area.
Key Metrics and Overall Business Goal Support
If you are unaware of how your product is manufactured and then distributed, how will you know by what means to optimize the movement? The first step of any supply chain strategy is to outline the procedural flow from original supplier to final destination - or to your company’s holding facility.
Mapping out each raw or sourced material is vital to the comprehensive understanding of how products reach your company’s warehouse for further customer distribution. Often, material comes from multiple vendor and manufacturer channels, increasing the need to know these granular supply chain details while making the arrivals a top priority for logistical purposes.
Developing an efficient supply chain end-to-end can at times mean making strategic decisions that will increase profit but may not necessarily be completely optimized for the end user. For example, guaranteeing a product will always be in stock will typically lead to carrying excessive inventory and stifle manufacturing volume at any given time.
However, the flip side of this may mean customer service and satisfaction decrease due to product ‘out of stock’ notices. Focusing solely on total cost could simultaneously decrease product quality and overall sales.
Historical Data Analysis for Future Growth Indicators
To know where you can go, you must first understand where you have been.
Business development can be a complicated and nuanced sector within the industry. When growth is brought back to analytical measurements, the expansive development is simplified.
Where to begin? Start with knowing exactly what product was sourced from where, how much was needed, and what the full cost was over the course of the previous year.
Next, move to reliability. Where the suppliers and vendors you used last year reliable and easy to work with? Were their prices competitive? Were their delivery times met with consistency? If there were any unwarranted discrepancies, identify them and what the main causes for each were.
Pro tip: Compare vendor performance on a year over year basis. This will highlight any gaps while allowing for a clear valuation to be placed on each supplier moving forward in your supply chain strategy.
Customer Service Adaptation
Maintaining market flexibility is vital to the success of your business. Consumer demand and logistics agility will allow for a seamless transition from one quarter to the next while continuing to increase growth on a comprehensive scale.
Prices and delivery expectations are two of the most volatile variables within customer demands. Is your supply chain elastic enough to effortlessly flow in the ever-evolving channel of customer needs?
Thanks to technological advancements, companies now have the ability to adjust operations on a daily basis instead of waiting on monthly production reports to then adapt, scale, and modify based on long-form metrics.
At the end of the day, customer service is the integral component to scaling a business. If your supply chain is running efficiently, customer satisfaction is close to a guarantee.
Thorough Inventory Management
Never allow inventory to get out of hand by neglecting to closely monitor your SKU count and / or individual product offerings. Critical to the optimization of your supply chain is knowing where your finished inventory or crude materials are within the pipeline.
Warehouse management services, cloud-based initiatives, and various other SaaS options allow companies to see stocked inventory to stocked shelves on a near real time basis. End-to-end visibility is becoming more mission critical every single day. Investing in these management solutions could mean the difference between ultimate business success or failure.
Properly utilizing a 3PL warehousing and distribution model could save your internal operations team massive amounts of time. We discussed co-managing supply chains and collaborative international business in more detail in a previous post. Check it out here if you’re interested.
Imagine how much more effective your supply chain would be if you possessed the ability to communicate with suppliers in real time capacity. The question of product location would essentially be a thing of the past. These new inventory systems can do just that. The immediate return on the initial investment would be as close to a long-term solutions-driven assurance plan as you could hope for.
Operational Adoption of Innovative Technologies
The operational adoption could be derivative of or even a prequel to inventory management solutions. The future of AI driven supply chains, machine learning, and warehousing robotics are very much a reality in today’s production line.
It is no longer a matter of when technology will supplement human interactive data, instead, how much are you willing to invest in your company’s innovative terms up front. Are you an industry leader by way of technological advancements? Or do you prefer to follow a more traditional path once the trail has been cut?
Regardless, digitization is among us. Your supply chain should be no different. As mentioned above, visibility is essential to the progressive evolution of your business, but this cannot be a blanketed statement. Pain points and product pricing structures are still viable factors that must be weighed in order for a company to show growth through profit.
Keep in mind, an optimized strategy is one that collectively integrates company goals, customer service, and has the means to operate utilizing current resources – not one that overreaches in any one area.
Co-Managing the International Side of Your Business
Eliminate the overhead, Gain the expertise.
CLN offers collaboration with International Transportation Management experts who continue to work diligently with clients facing complex logistics issues.
Middle market and emerging growth companies are faced with difficult logistics planning and are unaware of their need for strategic solutions implemented in an efficient and consistent manner. We provide an industry specific and knowledgeable team to proficiently audit, engineer, and customize plans to streamline your logistics and develop an optimized supply chain. [Excerpt taken from ‘Outsource Your Logistics Department to the Experts’]
We are a passionate group of professionals with expertise in areas ranging from transportation, Customs and compliance, to distribution, legal and finance. Logistics can be a labyrinth. One question leads to three others. Our team will help you through the maze.
Our focus is not on an individual product or service offering but rather a comprehensive approach to effectively managing and optimizing your supply chain.
If you would like a free consultation with the president of our company, or would like more information on how you could immediately increase the valuation of your current supply chain, reach out to us here today. We look forward to working with you.