5 Proven Ways to Improve your Supply Chain, Fast.

Supply chains are complex. But the upside of that complexity is it provides many opportunities to improve efficiencies across the breadth of the supply chain to capture market share in new channels and secure preferred status with major customers.

In recent years there has been a major shift towards new technologies to provide the efficiency boosts companies are looking for. These often centre around technologies such as Big Data, IoT, and blockchain. But what shouldn’t be forgotten is the scope of opportunities that still exist around implementing sound distribution and strategic decisions.

In this article, we will provide a breakdown of five key steps that can be taken to boost supply chain efficiency. These steps can still take advantage of modern software and technology developments but don’t require large capital outlays to be effective. 

Step 1 - Create a successful distribution strategy

One of the best ways to boost your distribution network is to actually design it. Despite the importance of distribution networks in meeting cost and service objectives, many network have never in fact been properly designed and are instead just the end product of years of natural unplanned evolution.

Undertaking a proper network review in tandem with modern network modelling software can allow you to review your distribution network design to identify potential weaknesses and evaluate improvement opportunities. It involves determining your logistics operating expenses, one off expenses, and the asset and capital investments associated with an existing baseline. This then allows you to compare the figures with alternative or more streamlined scenarios.

Reviewing your distribution strategy also enables you to properly assess storage or throughput constraints associated with your existing strategy and consider any new service levels that might be required to move into new markets. It additionally forces you to address options such as whether you should source more of your products from the local market or from countries closer to home.

Delivery lead times can be assessed properly to determine what impact they may have on sales revenue for certain market sectors. A new capability to get your product to market in one or two days instead of the five days it may take the competition is a serious competitive advantage, especially today when consumers have very high service expectations.

Whether the main driver is cost savings, moving into new markets, or improving your customer experience, redesigning your distribution strategy is a vital part of improving your business. The good news is that this process doesn’t have to be costly and can typically lead to savings of 10 - 15% that can be quickly realised.

Step 2 - Increase your distribution network

A supply chain company’s distribution network forms the backbone of its ability to thrive. Because it affects everything from business strategy to deliveries, your distribution network should be the foundation that you build the rest of your business around.

When evaluating your company’s network, it is important to assess at what point it makes financial sense to add additional distribution facilities, which has the effect of reducing both inbound and outbound delivery times and costs. Many modern supply chain organisations are moving towards having smaller distribution centres but ones located closer to their key markets, ports, and intermodal logistics centres.

By expanding or reengineering your logistics network it is possible to establish new customer channels as well as improve customer service.

Step 3 - Implement cash flow monitoring

Implementing cash flow monitoring is never going to be as exciting as rolling out a new fleet of autonomous picking robots for your warehouse but could be just as important in improving your business.

Cash flow monitoring is a fundamental tool that essentially is used to improve management of suppliers. It allows for accurate tracking of payment terms and conditions across all groups within the supply chain. This enables companies to properly understand the finer details of how much and how often suppliers and logistics companies are paid and breaks down any fringe expenses associated with each supplier that ultimately get passed on to your customers.

Step 4 - Create strong information conduits

Information conduits are the channels companies use to share information with their key partners. The nature of supply chain and the increase in data generated from tech such as IoT means that it is increasingly important that these conduits are robust. If partners aren’t receiving tracking information, product, or customer information in a timely and accurate way then your business will rapidly suffer.

The importance of these information conduits applies to both your external suppliers and customers as well as to your company’s internal processes and staff. There needs to be clear communication guidelines that apply to the sharing of information between the warehouse foreman, store room supervisors, purchasing managers, and delivery personnel.

It is also vital to continuously understand staff morale and concerns - an area that has traditionally been difficult to accurately track. But modern human resources software platforms allow for regular, anonymous surveys to be undertaken that act as a vital conduit for staff to communicate their most pressing concerns to management and helps identify genuine issues that can have major detrimental effects on productivity.

Step 5 - Track your inventory

One consistently overlooked area of distribution network design is inventory. This is because many steps taken to expand distribution such as adding more distribution centers result in the need to stock additional inventory. This then leads to increased storage and tracking requirements.

One way this problem can be overcome is by using modelling and modern algorithms to develop separate optimal levels of inventory for each facility. Continued improvements in IoT and sensor technologies also now allow for seamless machine to machine communications so that inventory tracking can be fully automated. This means inventory and processes can be properly connected so that information is available and can be shared in real time.

Both NFC chips and RFID tags can be used to accurately tag and track all items within the supply chain. These NFC chips, barcodes, and RFID tags can be connected to software and hardware systems in the cloud as well as be read by smartphones so that floor staff can always easily identify products without disrupting workflows.

Bringing it all together

Where complexity or resource allocation becomes a limiting factor for implementing efficiency gains, supply chain companies are increasingly turning to external logistics organisations. This is an attractive option for companies that want to remain focused on their core business or other key areas such as marketing.

Specialist logistics companies such as Timebox Logistics can handle planning, execution, and administration of all transport operations including warehousing, order management, shipment planning, billing, and performance reporting. These tasks can be optimised by specialist logistics companies due to economies of scale as well as through the utilisation of cutting edge technologies and freight management platforms. Timebox Logistics makes use of advanced telematics and sign-on-glass technology to allow clients to retain control over confirmation and close out of shipments.

By partnering with a logistics specialist, it is possible to improve inventory control, boost financial returns, and improve customer service and engagement by outsourcing technical processes to free up time to focus on your market and customers.

Ultimately, making efficiency improvements to your supply chain business involves better understanding your own business and customers, identifying existing weaknesses and opportunities for process improvements, and partnering with experts where necessary. With these strategies in mind, it is possible to significantly boost your company’s productivity and market share in a relatively short period of time.

Bastian Consulting has a deep industry focus on senior level supply chain roles in the APAC region. Managing Director, Tony Richter, is an expert in the supply chain industry with 7+ years executing senior supply chain search across APAC. He works only with a small portfolio of exclusive clients and uses a transparent, credible, and focused approach to establish trust with all his clients and candidates.

Want to learn more about how to improve your Supply Chain process? Check out the below links:

The Exit Interview Guide For Senior Supply Chain Executives

15 Tough Questions To Ask Supply Chain Executives In An Interview

Bastian Consulting Critical Skills Download