5 Pillars of Effective Supply Chain Management

Photo by Norma Mortenson on pexels

Have you ever wondered how that phone in your pocket, the shirt you are wearing, or even the meal on your plate got there? The answer lies in a web of networks called supply chains. Supply chain management is the management of all the logistics of a business and its providers, from acquiring raw materials to delivering the final product to the consumer. But what is the key to having this process operate daily? In this article, we unravel the five critical pillars of supply chain management that ensure a seamless delivery of your goods. 

Supply Chain Visibility

Supply chain visibility is the foundation of proper supply chain management. It refers to a holistic and up-to-date view of all factors, ranging from purchase, manufacturing, transportation, and supply. This complete view, if facilitated by advanced technologies like radio frequency identification (RFID), barcoding, and delivery management software like Milenow, allows you to:

• easily feature the shipping of products

• monitor inventory levels

• pinpoint possible problems before they inflate

Increased visibility leads to more informed decision-making and streamlines resource allocation to enhance operational efficiency. In this context, a clear and visible supply chain is crucial for a competitive advantage that helps develop customer trust.

Supplier Relationship Management

Suppliers are essential to the supply chain since they facilitate procurement of raw materials necessary to manufacture goods and services. They ensure a constant supply of material to the production line so that the manufacturing process does not stop. 

A good supplier relationship management model begins with the rigorous screening of potential partners. However, it is also important to identify quality or standard, reliability, and deliverability, as well as aspects of sustainability and the costs incurred. Working with suppliers who provide premium-grade products results in a clear value – a better and cheaper supply chain operation.

However, the benefits of supplier relationship management don’t end here. Its core advantage lies in promoting collaboration. This holistic cooperation model goes beyond the goal of gaining the best price. Thus, sourcing professionals and supplier partners can open new frontiers for product innovation, joint creation, and a more flexible approach to responding to dynamic market conditions. In the end, solid and long-term supply chain relationships support supply chain development for organizations and their suppliers, granting a win-win situation within the supply chain network.

Inventory Optimization

Keeping the inventory track from becoming overstocked or understocked is another crucial factor in supply chain management. When stored in large quantities and for a long time, inventory takes up capital and incurs high costs. On the other hand, having too little inventory creates the problem of stock-out and customer dissatisfaction. 

Businesses may use approaches like forecasting to address this problem. Along with this, they can adjust the safety stock correctly, that is, have adequate stock to ensure that customer demands are met without having to order ample stocks. 

While cost reduction benefits the company's bottom line, it also ensures that customers are offered quality services, thus improving the firm's market position. Moreover, the company can follow concepts like J.I.T. inventory to minimize wastage and enhance its business operations. 

Risk Management

Globalization is a reality! Practically all modern supply chains must navigate its ever-complicating landscape. Many factors, such as natural disasters, geopolitical changes, cyber risks, and supplier unavailability, might hinder an organization's smooth operation. Risk assessment and contingency measures are significant strategic assets that any business needs to have to be ready for such difficulties. 

This is the only way to be on the right side of the equation to prevent setbacks. Businesses need to:

• Consider all possibilities of risk at any level along the entire chain.

• Evaluate the level of each risk on a scale of low to high.

• Employ the services of several suppliers and employ cloud security.

• Develop contingency plans that outline specific actions to identify risks.

Risk mitigation measures also help contain risks and minimize likelihood and impact. With contingency plans, companies can reduce the effects of interruptions to a minimum and continue business operations. In turn, they protect their operations and reputations.

Continuous Improvement

Today, the pace of business is breakneck. Therefore, for supply chains to compete effectively and remain relevant, they have to be dynamic. Constant improvement and innovation are the premise of the overall goal.

This could be described as supply chain flexing. Organizations always need to evaluate and review different activities and establish areas for improvement. This strategy enables the firm to be flexible and adapt to situations in the market as they exist since markets are constantly changing.

Supply chain management is a complex process, but by adopting these pillars and implementing practices, it will be possible for companies to tackle the challenges involved and gain a lasting edge in the current dynamic business environment.

Author Bio:

Rabab Toor is a content manager at Squarepeg and a freelance writer. With a keen interest in technology, the latest trends in digital marketing, logistics, and crypto, she enjoys sharing her insights and expertise on Medium.

Guest Post: 6 Important Tips for Effective Logistic Management

Running a business comes with a lot of responsibilities such as supply chain management, dealing with manufacturers, delivering and shipping products. Logistic management is a detailed and complex procedure that takes care of all these things.

If you want to run a successful business and have satisfied customers, then you need to have a proper plan for logistics. In every business, there’s a proper sequence of how every operation works.

It starts with manufacturing products, distributing them and supplying, transporting them to designated warehouses, adding them to inventory, and finally getting them shipped to the customers. It can be a tricky and elaborate process which is why it’s important to handle it properly.

All businesses work with a proper rhythm, and if there’s a fallback in any step, the whole system can come crashing down. It’s essential to have effective logistic management so your business can run smoothly, and here are some important tips to keep in mind.

1.     Develop a Plan

In the business domain, the most important step is to formulate a proper plan that defines your goals as well. Without planning, you can’t accomplish anything, and you need rules and restrictions to run a smooth business.

Logistics is all about having a steady flow of your products, storage, and shipping them to relevant consumers. It’s a lengthy process that can’t be managed without a detailed plan. You need to create a plan that is going to help you carry out all the important tasks and deliver what you have promised.

An effective plan looks like this:

1. Manufacturing the products in the required quantity.
2. Moving the products to designated places.
3. Transporting all the goods at the right time.
4. Storing them in warehouses in the right condition.
5. Delivering them to the right outlets.
6. Shipping them to your customers in perfect shape.

Without the help of a plan, you will face a lot of hurdles, and your customers won’t be satisfied as it’s easier to damage the goods to deliver them to the wrong location during the entire process. Everything has to be checked twice, so there’s no disruption or delay in delivery.

2.     Hire a Logistics Manager

Your company is going to need a competent logistics manager to carry out your plan effectively. There needs to be someone in charge to keep everything under control and help carry out everything without any hassle.

Hiring a logistics manager with a great temperament will help keep things moving and deal with any issues that come up. The whole process of logistics can be quite stressful, so it’s important to have a manager who possesses great interpersonal skills to handle any employee issues and make necessary arrangements to keep the business working.

The right logistics manager will help a proper network of people that might come in handy in case of any emergency, and he will be well-equipped to come up with solutions. Any delay in procuring the goods can result in a huge loss to the company. Therefore, hiring the right person to handle any mishaps will prevent any losses.

3.     Adopt Automation

The world is a global village, and it’s only right to change accordingly. One of the most important steps of running effective logistics is to make sure everything is automated. Technology plays a major role in the success of every business nowadays. Hence, if you want to boost your efficiency, you need to automate your logistics process.

You can use reliable software to run an automated logistics process because it can keep you updated with every step of the process. You will be informed about the exact time and location of your goods and where they are going. It saves a lot of time and manual labor as you can use this system to ensure everything is going smoothly.

4.     Have a Contingency Plan

Having a contingency plan is an essential part of any logistics operation because no matter how well prepared you are, it’s good to always have a backup in case anything goes wrong. Logistics managers need to carefully follow the supply chain plan and be prepared to deal with any problems that might arise during the transportation or delivery of your goods.

A contingency plan will help keep your inventory in check as well; even if you successfully procured the goods, it’s important to keep a record of everything and make sure there are no losses. At times, there can be product shortages which can negatively affect sales. Thus, a backup will help overcome any issues.

For example, if you are managing the logistics of a service-based business like carpet cleaning Stevenage, you must have a contingency plan for shift timing, personal going on emergency leaves, backup cleaning vans, and so on to manage smooth operations.

5.     Warehouse and Transportation Management

Every business owner has to rely on different warehouses to store their products, and a huge part of your logistics operation relies on how well the goods are being stored. You need to have a proper facility that can take care of your goods in the meantime and effectively deliver it to the customers.

Managing the transportation process can be tricky because you need to make your every product is packed properly and that it reaches the right location in one piece. Any damage to the product can result in delays and customers’ not getting what they ordered, so transport needs to take the plan most shortly and securely possible.

6.     Adapt and Improvise

A logistics management process can be complicated, but the only way to make sure it stays effective is to keep a record of every data and run a thorough analysis. You will need to come up with different strategies and improvise if you need to deliver different kinds of products in good shape.

Another way to have an effective plan is to get feedback from every single operation you run and learn from your mistakes. You can create plans using all the data you have collected and analyze all the metrics to fix any flaws in your system.

Takeaway- Run a Successful Business Using Logistics Management

Logistics management is an important process, no matter what the size of your business is. You need to constantly adapt to new conditions and improve so your system can run without any problems. The supply chain process needs to be logical and well-organized, so your products can get to different locations at the right time and in the right shape.

These important tips will help you come up with a plan and tell you how to deal with any issues you might face. It’s all part of running a successful business and building brand loyalty.

Author Bio: 

Arslan Hassan is an electrical engineer with a passion for writing, designing, and anything tech-related. His educational background in the technical field has given him the edge to write on many topics. He occasionally writes blog articles for  Carpet Cleaning London