Supply chain management unites different departments of a business which also includes vendors, distributors, suppliers, laborers, and workers. Supply chain management allows the right people to make good business decisions on the basis of a data framework.
Supply chain management implementation is required by medium and large-sized organizations which means there can be different complexities. There are basic steps of SCM:
- Sourcing supplies
- Delivery and returns
Each of these steps needs improvement as the business grows. These steps can be improved with the following four attributes:
SCM is a complete package for every complex and large business model and sometimes, it makes people wonder why it needs improvement. The answer is that with the increasing global demand and the raised benchmark of user experience, there will always be room for improvement in supply chain management.
Below are some ways/practices/strategies to improve supply chain management.
Hire Supply Chain Professionals
You will be surprised to know that there are very few SCM professionals in the global market and that is why you need to get your hands on the ones you find no matter how much they charge or how much time they require. Moreover, you could provide necessary training in supply chain management to your current employees.
Enhance Your Distribution Network
The more distributors are on your company’s panel, the more sales your company will have. This means that you should improve communication among your employees and distributors by all means. Make sure that the software that connects the distributors with your company is reliable and compliant and see if it is working in optimum condition.
Range and Line Up Supply Chain Team
This means assigning designated roles from the senior level staff to the laborers. Make sure every person in the company understands their job role so that everyone knows what they have to do – when these things streamline, the communication level is enhanced and your supply chain team will be aligned for any challenge. This will also allow every employee to have a say and it will encourage them to make informed decisions.
No company wants to run out of stock and this is where greed comes in and makes companies buy extra stock and resulting in overloading the inventory. Overloading the inventory is hugely expensive and overburdens the supply chain team as well because they will be maintaining the inventory and they will be spending more time tracking it. Meanwhile, the trends could change at any moment and the overloaded inventory will go in partial loss. So, plan about how much inventory your company needs.
Make Strong Relationships with Suppliers
Just like enhancing communication with the distribution network, you have to establish good relationships with suppliers as well. Your and the supplier’s goals should be equally likely so that both parties work on common grounds – this results in maintaining a balance. Finding reliable suppliers is like finding a gold mine and you need to make sure that they are also satisfied with your company’s policies, so, always give them edge in every possible matter.
Track Cash Flows
When it comes to large organizations, tracking and monitoring cash flows is very much difficult and if it is not done right, there can be a lot of problems in the processing of supply chain management. In order to improve that, you need to monitor that all payments are coming and going according to the mentioned payment policies, terms, and conditions. Also, you need to keep a record of payment methods and technology being frequently used.
Create a Supply Chain Council
Just like having a board of directors, a supply chain council gives directions to companies and removes any barriers in the supply chain processing by introducing new rules and by changing the policy. They can suggest new and improved supply chain management strategies that will be rehearsed by all employees of the company including the partners, stakeholders, and CEO of the company.
Administer Operational Expenses
To improve supply chain management in any medium and large sized enterprise, make sure that you take control of operational expenses. You can create more profit and revenue by controlling operational expenses and that can be done by purchasing the right volume and right supplies for the company.
Monitor Supply Chain Metrics
Every company should have a benchmark or set a parameter that will verify the quality and quantity of stock/inventory and supply chain performance. Following are the prime metrics of supply chain management that can be tracked and monitored to improve SCM:
- Supply chain life cycles
- Inventory velocity
- Sales to inventory ratio
- Warehousing cost
- Accurate order rate
To systemize every processing of the company, you need the best AI ERP. This will automate basic processing which will give more chances of improving supply chain management. For example, it can give notifications and alerts when the inventory is low and it automatically purchases and buys from suppliers. Get an ERP that automates CRM and whatever is repetitive.
Use Latest Technology
To improve supply chain management, see the departments and processing that are not giving desired results and see the latest technology that can optimize this processing and departments to produce good results.
You can transform your company/business by improving the supply chain management core. Using these strategies at the right time and, in the right way will enable you to see a drastic rise in revenue, profits, and margins.