Suppose you’re studying to attain a Masters in Logistics and Supply Chain Management. In that case, you’re likely already familiar with the key strategies involved in achieving supply chain success.
For everyone else, allow us to enlighten you. First, you’ll need to focus on fostering strong relationships with your suppliers. Next, you must consider your customer – your end customer, or end user, that is. And finally, your ultimate supply chain management success will depend on your ability to dig deep into your business data.
Stay with us as we take you through these tips in further detail.
Tip # 1: Forge and Foster Strong Supplier Relationships
The first step to successful supply chain management? Fostering strong, mutually beneficial relationships with your suppliers.
How to do this, then? Business owners must call upon the four cornerstones of well-aligned supply chain relationships, these being:
Setting Boundaries and Creating Agreements
This essential relationship-building step involves establishing boundaries and expectations around agreed outcomes and business processes. This is when service-level agreements are made and agreed upon by both parties. As well as this, both parties will need to agree on the operational procedures that will enable agreed service levels to be met.
Establishing Objectives and Measurable Outcomes
Here, Key Performance Indicators (KPIs) will need to be established. This involves setting measurable performance goals that both parties clearly define and understand. In addition to this, both parties must agree on how their performance will be measured, and how the successful attainment of business objectives will mutually benefit all involved.
Building Trust, Transparency and Openness
Another cornerstone of strong supplier relationship building? Fostering open, honest and transparent communication. Acting with integrity and considering each others’ best interests in all business dealings also allows both parties to build trust and strengthen their relationships with each other.
Create Contingencies and Conflict Resolution Strategies
Having built trust and a culture of openness and transparency in your dealings with your suppliers, you will have solid foundations for conflict resolution should any disagreements arise. Misunderstandings can, as such, be minimised, and worked through together as required.
Tip # 2: Consider Your ‘End’ Customer
Relationships with your suppliers are critical. But just as important? Considering the needs of your customer. Your end customer, or end user, is ultimately who you are selling to, and as such, the success of your business depends on them.
As the last step in your supply chain, your end customer will be the person who benefits most from the fruits of your labour. They’ll be the ones consuming the finished product, after all.
So, when it comes to supply chain management, your success in overseeing business operations – and logistics such as transport, shipping and delivery – will ultimately determine how satisfied your end customer is with your product.
Tip # 3: Dig Deep into Your Business Data
Finally, to be successful in managing your supply chain, you need to dig deep into your business data. Using data analytics tools can be immeasurably helpful with this, and can help identify areas of improvement for your business, as well as areas in which you are performing well.
This is also where calling upon measurable KPIs to monitor performance can serve you well. Some of the key supply chain KPIs you should be measuring as a business owner? These include delivery timeframes and ETAs, the cost of stocking, maintaining and replenishing your inventory, as well as your business’s inventory-to-sales ratio (ISR), and of course, shipping and freight costs versus profit margins and revenue.
If you’re a business entrepreneur who is keen to achieve supply chain success, ideally, this article has shed some light on how to go about it.
As mentioned, supply chain success depends on the sum of many moving parts. Fostering strong relationships with your suppliers by building trust and establishing boundaries is one of these. Another critical element? Business owners must consider their end customers in all of their business operations and processes.
But what is success if it cannot be measured? As a business owner, it’s essential to review your organisational data to monitor the performance of various aspects of your supply chain. This will help you identify your strengths, and also, areas where you can potentially do even better.
