From point-of-origin raw materials to finished goods delivery, Supply Chain Management (SCM) controls the entire production process. It ensures the efficient management, movement and storage of raw materials and work-in-progress/finished products. While proper supply chain management can have amazing results, poor management can be devastating to the viability of your business.
The Impact of Poor SCM
Just imagine how much your business relies on successful supply chain management. Unplanned events such as dock worker strikes, transportation derailments, road traffic accidents and severe weather all can have horrible repercussions on your business if not properly considered. There are too many risks when SCM is left to chance. Lost money, business and opportunity cost, as well as spoilage and dissatisfied customers are only a few of the possible outcomes.
Proper SCM considers anticipated and unforeseen disruptions, but many small business owners sometimes overlook the importance of SCM. Proper supply chain management alleviates a myriad of problems and contributes to the overall success of your business. What does a successful SCM program look like? Read below for a list of characteristics and tips to create change when building or repairing your supply chain.
Traits of a High-Performance Supply Chain
A high-performing supply chain has the following six characteristics:
- Leadership: Strong leadership focusing on supply chain management as one intricate system instead of separate and distinct parts.
- Analytics: Uses advanced analytics to determine product demand in volatile markets.
- Process Integration: Strong horizontal processes including revenue management, sales and operations planning, supplier development and corporate social responsibility.
- Interdepartmental Cohesiveness: Capable human resource department, a well-integrated finance department and a supply chain center of excellence.
- Improvement: Continually designing and redesigning supply chain flows, including form and function of inventory, stocking locations, interplant shipments, the alignment of supplies and channel design.
- Technologically Advanced: Strong advanced planning capabilities going beyond the spreadsheet, which aren’t geared to manage modern processes. Spreadsheets cause problems with user interfaces, scalability, lack of ability to calculate “what-if scenarios” and encouraging ‘finance entrepreneurs.”
10 Tips for Supply Chain Improvement
- Get rid of spreadsheets.
- Segment your supply chain base.
- Use software specifically made for your industry.
- Cultivate employee involvement.
- Integrate sales, operations, finance operations and information flows.
- Monitor performance of all involved.
- Use tracking devices and mobile technology whenever possible.
- Analyze information and act based on findings.
- Produce and disseminate useful information rapidly to manage the process effectively.
- Insert marketing dollars into supply chain planning.
Supply chain management ensures your most precious cargo is manufactured and shipped efficiently while keeping the customer happy!
Supply Chain Assistance
Sometimes, you can’t do it all on your own. The Michigan Manufacturing Technology Center offers Supply Chain Management and Optimization consulting services to help Michigan manufacturers improve their performance. For more information call 888.414.6682 or contact us by clicking here.