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An insufficient supply chain can result in unhappy customers who won't return, creating lost sales in the future. Such inventory issues can happen when an employee isn't adequately trained, inventory counts are off, too much or too little inventory is ordered, or inaccurate forecasting occurs.
Without the resources of large corporations and because they carry comparatively smaller inventories, midmarket companies can be especially vulnerable to these issues.
Here are three key goals to integrate into your supply-chain strategy.
1. Collaboration
Bob Collins, senior director of professional development at APICS, a supply-chain-management professional association, says collaboration is one way to achieve such visibility.
Collaborating between departments is a good place to start. Salespeople, for example, have unique insights into long-term inventory needs because they speak with customers and understand demand. Sales, marketing, and purchasing should not only be in regular communication, but also be integrated end-to-end. This ensures, for example, sales forecasting is incorporated into the supply chain, making the flow of incoming raw materials in sync with expected future sales.
But collaboration should extend outside the company's walls as well.
"Collaboration can take many forms at many different levels within the supply chain, be it order placement, inventory management, or joint product development," Collins says. "In some cases, working with a third-party partner, like a third-party logistics company, can provide organizations with the insight they need."
Not only can third party logistics companies provide value by leveraging their extensive resource networks and allowing businesses to efficiently scale, they can also offer access to customs brokerage capabilities and services like parts testing, repair, and refurbishment.
2. Contingency planning
Risk management is all about the future, so it rarely feels like a pressing task - until it's too late.
That's why it's important to make contingency plans for every scenario, from big crises, like how materials could be rerouted if transportation is disrupted by a natural disaster, to smaller ones, such as how to maintain operations during a website crash. Crises of all sizes can have ripple effects throughout the supply chain, and a good contingency plan will anticipate most of them.
"The most successful organizations are those with a well-crafted plan that mitigates as much of this risk as possible by planning for the worst-case scenarios throughout the supply chain," Collins says.
A healthcare company that ships products that must remain at subzero temperatures learned the value of contingency planning when faced with a power outage that closed nearby airports. Fortunately, the business had previously partnered with UPS, which maintains separate, parallel product distribution operations in Louisville, in case of such an event. It was therefore able to maintain operations and continue the flow of product to patients in considerable need, without delay.
3. Digital efficiency
Your raw materials and finished products aren't the only things flowing through your supply chain. Information flow is a critical component of inventory management. And just like any other part of the supply chain, the flow of data must be immediate and be shared between all partners to facilitate a successful digital information supply chain upon which important decisions can be safely predicated.
All kinds of data move through the digital supply chain, from real-time inventory levels and customer interactions with products to the locations of delivery vehicles. Forward-thinking companies are leveraging technology to track, communicate, and analyze this data. Frequently-used technologies for this task include GPS tracking, radio-frequency identification (RFID), barcodes, smart labels, and wireless sensor networks.
But many vendors and suppliers may still work via fax, phone, or paper-based systems, a communications mismatch that can disrupt the efficiency of a company's digital supply chain. For example, a business may use barcodes to track their inventory in their own warehouse and throughout the supply chain. But if a partner lacks the capability to process the inventory in the same way, the system loses its efficiency as soon as the product leaves the warehouse.
Companies should motivate their partners to incorporate themselves into the digital system for the sake of supply-chain-wide efficiency. Cloud-based software technology can help partners get on board by unifying information and processes.
To keep an entire company performing in top form, there's no better place to start than making the warehouse a collaborative, well-prepared, and efficient part of the business.
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