When a supply chain falls apart, it can be difficult to establish the exact cause of the problem. In most cases, however, it all comes down to inefficiency. Supply chains fail because, somewhere along the supply chain, someone or something (a technology or process) has failed to do its job properly. Dealing with these problems appropriately is critical not only in helping reestablish your supply chain, but in ensuring the overall health of your business as well.
Below are three valuable tips for businesses that may help to resolve some of the most common sources of inefficiency in the supply chain.
1. Build stronger, more cooperative relationships with vendors.
Most manufacturers rely on various vendors and suppliers to supply the materials they need to keep their products in stock. In some cases, inefficiencies may arise when a vendor or supplier fails to deliver items or services the business needs within the necessary timeframe.
Although there is no way to eliminate this possibility entirely, building a stronger relationship with your vendors is a good way to reduce problems and ensure that all vendors are doing the best to work within your timeline. People who like your company and feel good about your relationship are more likely to not just get things where they need to be on time, but go beyond the call of duty, which can be helpful when your company is in a pinch.
Find a company that is proactive about engaging. Even if these vendors charge slightly more for their products or services, things tend to balance out in the end.
2. Upgrade your supply chain software.
Your supply chain is only as good as the tools it relies on, and one of the most important tools for any supply chain is its software.
When your technology fails or moves too slowly, your entire supply chain can break down. Technology is always evolving, so if you haven't upgraded your supply chain software recently, it may be time to bring in new or updated programs. Keeping the best, most effective supply chain software will typically improve supply chain efficiency regardless of all other factors that may affect it.
When searching for new supply chain software, keep in mind that you are making an investment in the future. Even if the software requires a temporary increase in overhead costs, the right programs will boost efficiency and eventually pay for themselves.
3. Consider outsourcing fulfillment.
Many companies attempt to run their entire fulfillment process internally in order to save money, but not every business has the resources and knowledge necessary to operate in-house fulfillment well.
In some instances, poorly functioning in-house fulfillment operations end up costing the company more money because of errors and delays, as opposed to saving the company money. According to Insight Media’s Fulfillment Companies, failing internal fulfillment operations may be an indication that you are not equipped to handle the fulfillment process on your own. If this is the case, you need to consider outsourcing these tasks to a third-party provider in order to improve supply chain efficiency.
As with supply chain software upgrades, outsourcing fulfillment operations may cause your overhead costs to increase temporarily. However, if outsourcing to a fulfillment provider improves your supply chain's efficiency, the investment will be well worth it in the end.
Explore other possibilities.
The tips above are just three examples of strategies you can use to improve supply chain efficiency for your business. If you are still experiencing problems after putting these strategies into practice, you may need to perform a comprehensive supply chain audit to identify the source of the breakdown.