Supply Chain Success Criteria: What to focus on
When it comes to supply chain management, keeping track of certain criteria and metrics is super important in order to improve performance. This not only ensures success for the company as a whole, but also invests in your own personal success as a supply chain manager. So, in order to be a rockstar, you gotta develop a strategy that balances optimization, innovation, agility, and risk.
In this blogpost, we're gonna chat about our top five criteria for success and why they're so important. We'll also cover some things that supply chain managers should avoid in order to keep on top of their game.
The Top 5 Things to Keep in Mind:
- Money Matters: Keep track of your expenses including raw materials, transportation costs and labor costs. By doing so, you can identify areas where costs can be reduced, ultimately making your supply chain more profitable.
- Stock Levels: Make sure that you have the right amount of inventory at all times. By maintaining optimal levels, you can ensure that the supply chain is efficient and that there is no excess inventory that can lead to unnecessary costs.
- Good Relationships: Keep an eye on your suppliers and ensure they are meeting the required standards. By doing so, you can identify areas where suppliers may be falling short and take corrective action to ensure that the supply chain runs smoothly.
- Happy Customers: Make sure your customers are satisfied with the products and services you provide. By focusing on customer service, you can ensure that customers remain loyal and that the supply chain continues to be profitable.
- Risk Management: Identify potential risks in the supply chain and take steps to mitigate them. By doing so, you can ensure that the supply chain is resilient and can handle unexpected events.
By keeping these 5 things in mind, you can ensure that your supply chain is efficient, profitable, and able to meet the needs of your customers.
How SCM Managers Can Prevent Failing These Success Criteria
Stockouts:
Stockouts happen when we run out of inventory to meet customer demand, causing angry customers and lost revenue. Lucky for us, there's a way to prevent this from happening. Supply chain managers can use demand forecasting to analyze historical sales data and customer demand trends. This helps us predict future demand and adjust inventory levels accordingly. This way, we can make sure we have enough inventory on hand to meet customer demand and prevent stockouts. We can also use safety stock levels to make sure we have a buffer of inventory available just in case demand unexpectedly spikes. By doing this, we can minimize the risk of stockouts and keep our customers happy.
Overstocking:
Overstocking happens when we have too much inventory, which can lead to increased costs, spoilage, and waste. Luckily, we can prevent this from happening. Supply chain managers can use demand forecasting to analyze historical sales data and customer demand trends. This helps us predict future demand and adjust inventory levels accordingly. This way, we can make sure we have just enough inventory on hand to meet customer demand and prevent overstocking. We can also use safety stock levels to make sure we have a buffer of inventory available just in case demand unexpectedly drops. By doing this, we can minimize the risk of overstocking and keep our costs low.
Inefficient transportation:
Inefficient transportation is the worst! It causes delays, added costs, and lost revenue. But don't worry, we have a solution! Supply chain managers can optimize the transportation network. This means we identify the most efficient routing and scheduling of shipments, select the best mode of transportation (like truck, rail, air, or sea), and reduce the number of empty miles traveled. We can also use technology like GPS tracking and route optimization software to improve transportation efficiency. By doing this, we can reduce transportation costs, improve delivery times, and minimize the risk of delays and lost revenue due to inefficient transportation.
Poor supplier relationships:
We've all been there, bad supplier relationships lead to delayed deliveries, poor-quality products, and increased costs. But there's a way to prevent this! Supply chain managers can establish clear expectations and communication channels with suppliers. This means developing a supplier code of conduct that outlines the standards and expectations for suppliers, as well as establishing regular communication and feedback mechanisms to address any issues or concerns. We can also work with suppliers to identify areas where improvements can be made and provide support and resources to help suppliers meet the required standards. By building strong relationships with suppliers and treating them as partners rather than just vendors, we can ensure that the supply chain runs smoothly and that the products and services provided meet the required standards.
Lack of visibility:
Lack of visibility into the supply chain can lead to delays and increased costs. But we have a solution! Supply chain managers can implement a supply chain visibility platform. This platform provides real-time visibility into the entire supply chain, from suppliers to customers. This allows SCM managers to track inventory levels, monitor supplier performance, and identify potential issues before they become major problems. The platform also provides analytics and reporting capabilities, allowing SCM managers to identify trends and make data-driven decisions. Additionally, SCM managers can work with suppliers to ensure that they provide accurate and timely data and can establish clear communication channels to address any issues or concerns. By implementing a supply chain visibility platform and working closely with suppliers, SCM managers can ensure that the supply chain is transparent and efficient.
How limbiq supports supply chain managers achieve success:
Get a Clear Picture of Your Supply Chain with limbiq:
limbiq gives you a cloud-based platform to track and monitor every aspect of your supply chain in real-time. With analytics and reporting capabilities, you can identify trends and make data-driven decisions. By collaborating with your suppliers, distributors, and retailers, you get a single source of truth for all your supply chain data. The result? Improved supply chain visibility, reduced costs, and better overall performance.
Reduce Excess Inventory and Boost Efficiency:
By tracking inventory levels and demand in real-time, you can optimize inventory levels and reduce the need for excess safety stock. limbiq's collaboration features allow for better communication and coordination between suppliers, distributors, and retailers, helping improve forecasting accuracy and reduce the need for safety stock. The result? Improved supply chain efficiency and reduced unnecessary costs.
Collaboration is Key to a Successful Supply Chain:
limbiq's platform allows suppliers, distributors, and retailers to collaborate in real-time. With a single source of truth for all supply chain data, real-time communication and coordination, you can improve supply chain collaboration. The result? Better forecasting accuracy, reduced lead times, and improved overall supply chain performance. Plus, with visibility into the entire supply chain, you can make better decisions and manage risks effectively, ensuring your supply chain runs smoothly and efficiently.
Want to learn how to achieve fast time to value in supply chain management? Download our free visual guide here.
Image Source: lookstudio on freepik
