Any business that exists today in the global market needs its supply chain to be resilient enough to become a plinth of its business. Everything else is built on top of it. How you handle the transformation and transportation of assets in that supply chain will decide how much value your brand holds in the market.
This blog will discuss SCM efficiency techniques to help you better refine your existing supply chain management strategy.
What's Supply Chain Management?
Supply chain management is the process of keeping track of the flow of goods and services. It includes all of the steps that turn raw materials into finished products. It includes actively streamlining a business's supply-side actions to give customers the most value and give the business an edge in the market.
The Supply chain management approach improves operational efficiency, earnings, and expenses. The main supply chain ideas are that they should be customer-centric, agile, transparent, and laced with innovative technology.
What Are Some of The Best Strategies?
1. Buffer the supply chain.
Buffers can help companies handle unforeseen delays. Three supply chain buffers are possible:
Inventory: Keep safety or buffer stock to avoid delays or demand surges (inventory management software makes this the most popular buffer).
Time Buffer: Goods arrive early to safeguard upstream or downstream processes or pre-delivery points.
Capacity Buffer: Utilise storage and manufacturing facilities.
2. Diversify production and sourcing
Over the past few decades, supply chain management disruptions have made businesses realise that depending on one supplier for the shipment of goods is risky. In 2011, natural catastrophes in Thailand and Japan delayed the export of nearly-finished vehicles.
Multisourcing and diversifying your network begins with categorising partners by cost and financial effect if they can't deliver. You can then partner with more vendors or a multi-location supplier.
3. Demand forecasting
It uses statistics to predict material demand ahead of time to avoid shortages. Demand forecasting reduces costs, improves lead times, and boosts customer satisfaction.
Surveying customers, watching social media, examining historical data and patterns, or consulting a consultant can estimate demand in advance.
4. Foster collaboration
Collaboration between supply chain partners can help improve the resilience of the supply chain. Businesses should work closely with suppliers, logistics providers, and other partners to identify potential risks and develop strategies to address them.
Conclusion
Making an effective supply chain strategy can be a complex process. Businesses must adopt measures and strategies which are flexible to minimise supply chain interruptions. These methods if adopted, can make a firm the best logistics company
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