8 Effective Ways to Perfect Your Supply Chain

Whether you are an entrepreneur, a business professional, a freelancer, or a consultant, getting a solid grasp of the best ways to optimize a supply chain is vital in building a strong foundation for your company—no matter the industry.

This way, you can ultimately achieve cost-effective business operations, deliver products and services on time, and skyrocket company growth and expansion.

What is the supply chain?

A supply chain is a network between a business and its suppliers and manufacturers to complete an entire production flow, involving a series of steps in order to move the product along and successfully deliver them to the end-users. The process includes sourcing raw materials, planning inventory, production, shipping, and distributing them to consumers both locally and internationally.

At first glance, running out of stock can be a sign that your business is doing well. While this may seem like a good problem, it’s still, nonetheless, an issue that must be ironed out as soon as possible if you want to propel your business to success.

High-volume growth is a result of a well-mapped out supply chain. As a matter of fact, according to a study released by Deloitte, 79% of businesses with outstanding and unrivaled supply chain management come out on top with above-average revenue growth.

Why does supply chain management matter?

In today’s ever-competitive economic landscape, it’s crucial to fulfill the demand of every customer promptly—there’s surely no room for mistakes and unnecessary delays. Having a smooth-sailing, streamlined supply chain can do wonders for your company, as you’ll be prepared for a myriad of business challenges.

● Low operational costs

With a well-managed supply chain, the entire production process takes less time and resources to complete, while minimizing the uneconomical back-and-forth and errors. Also, consistently monitoring your inventory can ensure you meet your business needs—all while reducing unnecessary waste and expenses due to excess materials and overstocking.

In addition, rather than manually shipping out and tracking the distribution of products, automated supply chain management systems allow for a more cost-effective logistics and overall operations.

● Boost customer satisfaction

Having a streamlined supply chain will ensure product quality and significantly reduce customer issues, thus providing them with better overall service. Thanks to technological advancements in the field, order management systems allow you and your customers to track shipments and fulfill deliveries in real-time.

Also, since we live in a time when the speedy delivery of services and products is expected, perfecting your supply chain is a must. Providing reliable service is a surefire way to gain the trust and loyalty of your consumers, scale your company, and beat the competition.

● Achieve steady business expansion

Knowing how best to optimize your supply chain—from sourcing and development of your products to managing your inventory and logistics—you can most definitely establish a reliable and trusted brand, set to thrive in today’s cutthroat market.

How to perfect your supply chain?

Encountering problems in your supply chain can negatively impact customer satisfaction and your overall business. Don’t let preventable challenges such as logistics and inventory issues hold you back and stunt your company’s growth. To perfect your supply chain, here are some proven ways worth exploring:

1. Define your initial inventory requirements

Often, starting a new business requires a lot of courage, patience, and sleepless nights, but not a lot of money. In having to work with limited cash flow, aside from keeping labor expenses at a minimum, it is essential to approach your inventory strategically—don’t be one of those retailers who buy first and plan later.

In addition to limiting your business to a well-thought-out range of products, defining your initial inventory requirements can make or break your start-up. Although it may be daunting, as you won’t have an inventory performance history to work with yet, you can start by studying industry trends and conducting in-depth market research.

This way, you can keep up with the demand without running the risk of ending up with a storage room full of goods you can’t sell.

2. Leverage tech solutions like automatic purchasing

Manually managing your inventory can be taxing and time-consuming. Once you’ve got your initial inventory down, you may want to start integrating supply chain software systems such as automatic purchasing into your strategy.

A good automated purchasing software intuitively place orders for you based on requirements or when it detects that your inventory drops below the set number. You’ll never have to worry about dealing with the evitable stress that comes with running out of stock.

On top of increasing efficiency, this kind of automation empowers business owners to focus on their core functions—keeping up with the ever-changing business landscape, making the right decisions for the company, and leading their start-up to success.

3. Include data insight and forecasting in your list of business priorities

The success of your supply chain is dependent on several critical factors, including access to accurate and timely reports that provide valuable insight into your business—from inventory status and purchasing history to product distribution. With real-time data insight, you can make tweaks in your supply chain strategy as needed and stop pressing problems before they even occur.

Along with data insight, knowledge in forecasting can also serve your business well, especially when shipping perishable food items to ensure you consistently meet the demands of the market while maintaining the quality of your products.

Although you can choose to start calculations manually at first, as your business scales, it would be best to invest in a good forecasting software eventually. The system can effectively and efficiently predict market shifts and trends more accurately and minimize risks, delays, and errors.

4. Keep track of your suppliers’ or vendors’ performance

The success of your entire business process lies in integrating a streamlined supply chain—as like any other chain, it is only as strong as its weakest link. However strict you are in your internal processes, you can’t have direct control over your suppliers’ performance.

As you depend on your vendors to help you bring your products to end-users, it is essential to vet them and continue to keep track of their performance. Take note of their competence, reliability, turnaround times, service and product quality, and error rates to establish more streamlined operations and avoid needless delays, bottlenecks, and downtimes.

5. Make sure to maintain healthy supplier relationships

While it is essential to aim to keep good relations with your customers, it is also critical to your company’s success to maintain a healthy relationship with the people you do business with—this includes your suppliers or vendors.

As they play a crucial role in your operations, having a strong working relationship with them can help you achieve high-volume growth. It can also be beneficial to align your goals with theirs, ensure timely delivery of products, and further improve the overall performance and quality of goods.

6. Conduct regular internal reviews to minimize risk

It takes more than just having a good entrepreneurial intuition to keep the competition at bay and come out on top, especially in the modern economic environment. While it may be advantageous to have such dependable instincts, it is even more beneficial to know the science of numbers and understand how to interpret valuable business data to guide your decision-making process.

Often, in the first year of your business, you’ll hit some bumps in the road, as the supply chain will be quite far from perfect. However, the key is to learn from experience—collect, manage, and analyze the data and information at hand. By regularly reviewing your process, you can gain insight into your business, overcome challenges, proactively solve problems, and ultimately iron out your supply chain.

7. Align accounting processes with your supply chain system

Ordering raw materials for your products, managing store inventory, and tracking the delivery of your goods are all necessary yet laborious tasks. As these undertakings are a handful, some may overlook the importance of weaving in accounting processes when mapping out their supply chain strategy.

By integrating your company’s financials into your supply chain management system, you can avoid taxing paperwork, payment processing wait times, and invoice mix-ups.

As you scale your business, order volumes are expected to increase—amplify your efforts by choosing to automate your accounting processes to seamlessly purchase the needed materials and deliver your products to your customers promptly.

8. Optimize your transportation and distribution tracking system

While you may not see the need to invest in a transportation and distribution tracking system during the initial launch of your business, it will soon be a fundamental asset as your business expands both locally and internationally.

Having a comprehensive system allows you to boost efficiency and ensure your products will reach your customers. Also, as encountering shipment problems is inevitable in any industry, having an automated transportation or outsourcing back office transport services and distribution system enables you to address issues and provide a more effective service promptly.

Key Takeaway

High-volume growth is a result of a well-mapped supply chain.

Perfecting your supply chain is a must to consistently meet the needs of the market and ensure product quality, especially when shipping perishable food items. Also, by effectively managing it, you can avoid inventory shortages, improve customer satisfaction, increase profitability, and lower your operational costs.

The key to crushing the competition and boosting your revenue growth is through a comprehensive supply chain management strategy that’s superior to all your business rivals.