Key Ways To Optimise Your Supply Chain Function
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For any supply chain to be effective it should be optimised, since if the supply chain is simply left to its own devices, it will quickly become inefficient and lose the ability to cope with sudden changes or problems that may surface.
Fundamental to any optimisation is ensuring that the supply chain is stable. This means that it should be able to provide goods in the format required, when they are required and in a condition that is satisfactory. That may sound very easy, but the reality is that it is actually quite difficult to do!
Optimising the networks involved are also important to the supply chain. This can involve looking at the different suppliers who are involved within the supply chain and then establishing a network of suppliers. This network is a means of communicating with suppliers and working through any problems with supplies. This communication is very much a 2 way communication, since it provides the suppliers with a platform to air any problems that they have and it provides you with the ability to address any problems with regard to supplier performance issues
Optimisation on a strategic level may involve looking at the different locations of suppliers (perhaps a global supply chain), their capacity for storage and how they can provide goods. One of the integral concepts of Lean thinking is that waste should be eliminated and if the goods have to be transported then there is waste, so this should be kept to an absolute minimum in order to save resources. So if suppliers are thousands of miles away, then is there any room for bringing them closer or appointing suppliers based within the locality?
From a practical point of view there may be opportunities to look at the design, so that the design can be altered to make it easier for the supply chain to supply parts needed for the finished articles. This may sound as if the supply chain is dictating design, but in fact it is adopting a holistic approach to design, so that the finished product is designed so that it will use the most appropriate items and will be durable and meet all quality control requirements.
Optimisation of the supply chain function should also involve some Supply chain management software or business to business applications being used. This could be using some sort of methodology including demand planning, vendor managed inventory systems etc. In a sense it does not matter which type of B2B applications are used, what matters is that the information between the supplier and the customer is maximised, so that both parties are aware of need and what demand is likely to be. This is more than simply networking with suppliers, this is about sharing sensitive information on a formal basis, with electronic data sharing being fundamental to a good working relationship.
Optimising the supply chain also requires good, mutually trusting relationships to be established with suppliers. There is no point in beating the supplier with a stick to get the goods delivered on time; rather you should simply aim to have a good relationship that will work well and bring benefits to both sides.
Establishing these types of relationships requires there to be a philosophic approach. All the barriers and obstacles to collaborative working need to be swept aside and there has to be a real drive to ensure that the supply chain is stabilised and optimised. This requires a shift in culture that can be quite difficult to achieve, but when the supply chain is optimised, the rewards are great, since the finished product will be produced and will meet quality control requirements with ease; no small feat….
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