Supply chain managers are increasingly required to balance traditional goals like cost containment with the need to increase their supply chains’ operations and deliver new strategic wins for the business as a whole. Predicting disruption, managing risk, and constantly improving efficiency are all essential aspects of overseeing a modern supply chain. So too are collaboration, sustainability reform, and learning to see value as more than a dollar amount.
Knowing where to begin, and then how to continue, is challenging. Therefore, we’ve identified the 7 supply chain management best practices that will have the biggest impact on a supply chain.
1. Ensure supply chain and business are aligned
Aligning the goals and practices of supply chain with the rest of the business is paramount to operating a successful supply chain. It’s all too common that the supply chain is siloed from the parts of the business that it serves. The result is often multiple discrete business units with varying priorities. This creates disparities in time and resources, leading to information gaps, poor communication, unnecessary errors and inconsistent processes.
Creating new lines of communication between the supply chain function and the wider business is a good place to start. New roles focused on liaising between siloed parts of the business, digital tools that promote collaboration, and new processes can play a pivotal role in facilitating collaboration. At all times, establishing and remaining focused on high level business objectives is vital. Without this focus, it can be difficult to ensure all parties are pulling in the same direction.
2. Foster genuine collaboration with the supplier ecosystem
Just as collaboration within the business is essential for a functional supply chain, fostering genuine collaboration with the organisations outside the business is essential. While many organisations are happy to highlight the importance of partnerships in their rhetoric, far fewer are taking a genuine partnership approach.
Finding suppliers with similar values to your organisation is a good start. Implementing a robust supplier relationship management platform can help keep lines of communication open. Effective communication in service of a shared goal supported by aligned values is essential to ensuring that products received from suppliers are of consistently high quality, procured at the right price, and delivered on time—every time.
3. Take sustainability seriously
Environment, social, and governance (ESG) strategies are about more than ethical behaviour. Increasingly, sustainable business decisions are critical to maintaining supply chain resilience and trust in a brand. Investors, stakeholders, suppliers, and customers are all prioritising ESG, and supply chains have some of the most significant impact on organisations’ environmental footprint.
By strategically sourcing from sustainability conscious suppliers and setting clear environmental standards for your suppliers, to purchasing renewable energy and exploring more eco-friendly alternatives for packing materials, you can ensure your supply chain is having a positive impact on the business’ sustainability efforts.
4. Prioritise value over price
Traditional supply chain management strategies focused on reducing cost to the exclusion of other goals. Today, prioritising the delivery of a valuable service over solely cost-containment will benefit long-term business objectives.
Convincing company leadership to prioritise value over cost might be challenging, but this approach will result in higher levels of customer satisfaction. It will also help ensure steady business operations, and establish your reputation as a dependable supply chain partner. Ultimately, the long-term benefits of added value will outweigh the short-term savings from cost-cutting.
5. Track the right metrics
Visibility is the first step towards making strategic, effective changes to your supply chain. In order to gain the accurate, granular understanding necessary to support strategic supply chain transformation, you need to track the right metrics.
From high level, top-down metrics like supply chain cycle time, down to more granular analysis like warehousing costs and inventory accuracy, the right metrics are key to enabling supply chain managers to identify strengths, and analyse inefficiencies to enable data-supported goals.
6. Recruit, develop, and retain talent
The increasing sophistication and availability of automation and machine learning technologies is reducing the amount of repetitive manual work required to operate supply chains. However, these new technologies are creating new demand for skilled workers. According to Deloitte, just 38% of supply chain leaders remain confident in their supply chain team’s ability to remain competitive in the current market.
Supply chain managers looking to embrace new technologies while closing the skills shortage gap will need to invest in acquiring new talent. Simultaneously, existing employees will need to be retrained and upskilled. Providing career and skill development opportunities for existing employees also aids retention. It’s vitally important for supply chain leaders to create clear, actionable paths to promotions that are both vertical and horizontal.
- Collaboration & Optimization
- Digital Supply Chain
