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5
Steps to a More Efficient Supply Chain
1.
Build relationships with vendors. It is
beneficial for vendors and buyers to collaborate on
inventory management and even new product development.
By sharing information about market trends, demand and
capacity, companies can avoid cyclical overruns and
shortages. This kind of cooperation helps both the
vendor and the customer to reduce transaction costs,
bolstering their bottom lines.
Such
relationships are based on trust. Seek out established
vendors with an experienced and knowledgeable sales
staff that knows the market and is willing to share its
research.
2.
Streamline your decision-making procedures.
Supply chain processes today require that decisions be
made based on a lot of information in very little time.
Where it was once a matter of weeks, executive decisions
in the supply chain must now be made in days and even
hours. If critical assessments and evaluations are
bogged down in bureaucracy, opportunities will be lost
and profits will suffer.
To
take advantage of fast-changing market conditions,
customer demand or part shortages, and managers must
have the experience and --- most importantly --- the
authority, to act quickly and make decisions.
3.
Use the three Cs to eliminate
organizational barriers. Units within an
organization often inadvertently work in opposition to
one another. Independent functions, such as production
and fulfillment, usually maintain their own support
systems --- and these often come into conflict.
To
foster closer working relations between units, it is
helpful to apply the three Cs.
Communication:
It is important to stress constant communication between
enterprise organizational units and supplier networks.
Coordination:
Coordination is the process in which those units and
networks interact on a timely basis.
Collaboration:
Collaboration is the ability to electronically share
information about business activities and interact
across the supply chain.
Together,
the three Cs create a more efficient supply chain
operation.
4.
Make better use of mobile devices. Ironically,
many companies in the electronic components and computer
parts industry have been late in adopting cutting-edge
tools. A case in point is the use of mobile devices to
speed the exchange of information along the supply
chain.
The
utilization of mobile devices such as bar code readers
are rapidly changing the way companies conduct sourcing,
manufacturing, and distribution activities. They have
proven to be extremely effective in improving cycle time
and reducing costs. As new features and functionality
are added to them new opportunities for value-added
services will be created.
5.
Recognize the importance of transportation. In
recent years most discussions about improving the supply
chain have focused on information and technology. But of
equal importance is the role of transportation.
Information can be digitized and sent thousands of miles
in a matter of seconds, but parts and raw materials
cannot.
It
is therefore important to acknowledge the potential
problems that an interruption in transportation systems
can create and plan workable backups. Collect
information about labor negotiations, fuel prices and
weather conditions when choosing a carrier. Keep in mind
that transportation represents approximately 60 percent
of logistics costs and is the first place to look when
economizing. |
