A supply chain strategy explains how a company plans to bring goods into the business and get them out to customers as effectively as possible. Considering every phase in the supply chain, such as sourcing goods, logistics and delivery, the strategy optimises operations to reduce costs and maximise profits.
Supply chain strategies have come into the spotlight recently, as volatile demand and complicated global markets have made supply chain networks more complex. It’s become vital for companies to have robust supply chain processes to overcome any disruption.
Unfortunately, off-the-shelf supply chain strategies don’t exist. You need to tailor your strategy to your company, industry, and business goals. This article will discuss some areas that you should review to develop your strategy.
A good supply chain strategy is about fulfilling demand, driving customer value, improving responsiveness, facilitating financial success and building a good network. The primary goals of efficient supply chain management should be faster delivery, higher efficiency and accelerated cash flow.
A robust supply chain management strategy can also reduce risk and lower the impact of disruption. Processes and systems to help respond to issues will aid with faster recovery and enable you to build or maintain your competitive advantage.
There are two main directions to focus your supply chain strategy:
There are three phases to creating a supply chain strategy:
Optimising your supply chain design starts with understanding your current supply chain. Where is it working well? Where is it causing you problems?
Each part of the supply chain is connected, meaning a problem in one area can compromise the entire global network.
If possible, use real-time data and big data insights to delve deep into each area of your supply chain. This will provide maximum analysis and understanding of your current setup and support sales and operations planning.
Highlighting areas for improvement allows you to fix them. For example, having more accurate demand forecasting, warehouse automation, diversifying your supplier network or bringing new technologies on board to give you real-time data.
Your strategies should have backup plans, with backup plans for your backup plans!
Here are four recommended components of supply chain planning:
Supply chain management (SCM) is how you execute your supply chain strategy. It involves coordinating suppliers, logistics, warehouses and orders across the global supply chain to ensure you can meet customer demand.
Effective supply chain management can prevent damage to a company’s reputation and ensure it can meet business objectives and sustain a competitive advantage. To maintain or improve effectiveness, you must continually review your supply chain management execution to highlight any inefficiencies or gaps. You should keep on top of trends in supply and demand and any seasonal fluctuations.
Understanding supply chain trends and new technology will also help you identify areas of improvement in your supply chain strategy and inventory management processes.
An effective supply chain strategy depends on the right technology and software to support its implementation. Appropriate software will help you save time and become more efficient. It can also help mitigate supply chain risks, which can help protect already tight profits.
Examples of supporting software include:
Depending on company goals, more advanced systems, such as automated guided vehicles, robots, drones, and artificial intelligence, can also support supply chain strategies.
If you’d like to discuss your supply chain strategy and how EazyStock can support inventory management, please speak to one of our team to arrange a demo.