New technology advancements and systems are changing the way businesses manage their supply chain. Once just an internal system, modern day supply chains have transformed into an intricate nexus of people, processes and technology.
In today’s business landscape, many active supply chains are expanding thanks to vast leaps and improvements in technologies and internet softwares over the last twenty years. Such innovation has enabled a collaborative ecosystem that extends well beyond legacy enterprise operations.
Such innovations have helped modify supply chain operation drastically; allowing for leaner operations, better cost management, and faster response times when the market fluctuates.
No complete step-by-step guide for supply chain optimisation exists to ensure that your business stays ahead. However, there is a vast amount of research that recommends the eradication of core legacy systems, and the adoption of optimised systems to succeed in a volatile global landscape. Below, we detail a few ways you can navigate the new tools and best practices in order to establish a complete view of your company’s supply chain.
Customer demand planning
One of the most valuable steps your business can take to optimise your supply chain is to estimate your future demand. Demand planning places you in an ideal position to meet your financial targets every quarter, and deliver excellent service to your customers. It’s impact can be felt throughout your business; from sales and marketing, to manufacturing and distribution.
Despite the tedious nature of the task, forecasting your predicted product demand is one of the best ways to protect against many common business risks, including increased cost of operation, and excess inventory. It also allows you to better understand the cyclical wants and needs of your customers.
A successful plan involves data collection across all areas of your business—finance, marketing, operations, and sales—in order to accurately estimate cross-yearly demand by product. Once established, the plan goes on to influence the ongoing purchase of supplies.By improving your demand, you can:
•Reduce inventory costs
•Negotiate improved supplier terms
By following a more demand-focused, “pull” approach, this data-driven model allows your supply chain to minimise cost and maximise service and operational efficiency.
Inventory control and management
With its direct impact on your supply chain, inventory control and management must be prioritised in order to better comprehend your order volume and frequency to fulfill your customers’ needs ongoing.
Despite being one of the most crucial influences on profitability, small and large businesses often fail at good inventory management practices. Some are understocked and unable to meet customer demand, others are overstocked and thus operate at a loss—reducing cash flow and costing more to track. Effective inventory management is located between the two; requiring more planning to increase your long-term profits.
Use technology that integrates well
Efficient inventory control and management relies heavily on seamless technology. When investing in new systems, opt for those which connect and work together seamlessly. Installing a POS system unable to communicate with your inventory management software can cost you time in inaccurate inventory tracking.
As your business grows, you’ll naturally spend more time reviewing your inventory in order to mitigate the risk of your stock becoming unmanageable. Choosing good inventory management software and smarter integrated technology is a simple way to stay on-top of your operations.
Manufacture lead reports
Creating a comprehensive lead report helps maintain consistent transparency over your production performance and profitability. By taking the time to analyse your data, you can apply ongoing insights, and evaluate efficiencies to improve production strategies.
A lack of transparency regarding your stock movements can be problematic for business functionality. Turnover reports and inventory variance reports can help you keep your products relevant. Manufacture lead reports can help you understand how long stock replenishment wil take; giving you seasonal insights, as well as product similarities and data anomalies.
Auditing your supply chain
An understanding of your supply chain is essential in actively ensuring that every element of your business is working for you, not against you. While some events are unavoidable, carrying out a comprehensive audit of your supply chain can help you stay ahead. Analysing supply chain data helps you develop plans for order quantities that reduce carrying costs while also increasing your success.
Whether you decide to carry out a thorough audit once a year, monthly, weekly or even daily—make sure you pair your data with a physical count of your inventory, to regularly ensure it matches up with your digital footprint.
Logistics and IoT
The real-time accuracy of your inventory has never been more critical. Logistical errors can be costly, with inaccurate operations requiring substantially more manual labor to correct, and furthering possible monetary loss.
Keeping track of your inventory, and providing supply chain and warehouse managers with real- time access to data and insights will improve your overall operations. IoT not only automates your processes, but increases the visibility of your supply chain. With additional connected devices, you can increase overall processing speeds and maximise warehouse efficiency.
IoT sensors can be used to measure and report on many critical factors, such as location, movement and handling spee. Many companies are installing these in order to monitor both product movement, the use of materials, and any other assets inside their facilities. Shelf sensors can transmit real-time inventory information to a management system, handling speed, whilst also optimising dispatch times. Smart warehouses are helping to eliminate costly human error and increase quality control, ensuring inventory levels and equipment locations are tracked and monitored around-the-clock. In best practice, IoT can be combined with:
GPS, smart devices and mobile sensors, to help track and authenticate products and shipment
Tracking inventory and route planning, to identify where and when goods are delayed in transit
Radio Frequency ID (RFID) tags, to keep track of physical inventory by eliminating barcode or label scanning
Smart shelves and storage bins to communicate stock levels in real-time
Legacy inventory management systems, to lower costs and reduce errors
ERP systems, to improve record-keeping and predictive maintenance
Tracking data, to determine lead times for assembling manufacturing parts
Visibility across departments
Increasing transparency levels across your internal departments is an excellent way to understand exactly how your production is performing at all times. Having a clearer understanding of materials transferred, manufacturing bottlenecks, budgets and resources can improve production efficiency. Receiving real-time data and having thorough visibility into these portions of your manufacturing process allows you to make better business decisions, and identify key risks within your production plan. With a clearer insight into future workloads, you’ll be able to harness improved capacity planning and potentially increase your production schedule.
Furthermore, capturing multi-channel information and external source data—such as POS sales, as well social media information to identify ongoing trends and demand—can help you increase sales, improve responsive service levels and reposition your inventory to maximise results. True visibility across your supply chain will only help to enhance your business output.
Understanding your suppliers’ finances
Greater transparency and visibility between departments also allows for company-wide insights into your suppliers and their finances. All business-supplier relationships present risks, so understanding where potential weaknesses lie helps your company stay informed.
Departments can work together to manage these risks, resulting in tangible benefits. From strengthening links in the supply chain to reducing delays and improving customer service, understanding your supplier’s finances is key to optimising your supply chain.
With this in mind, you should aim to gather key supplier information such as revenue, financial references and continuity plans. This information helps reduce threats to your business, ensuring that there are no weak links in the supply chain who can disrupt the flow of your goods and services.
Optimising your supply chain
Optimising your supply chain has immeasurable benefits for your business. Aside from providing cost control and improving efficiency and accuracy, an optimised supply chain helps you understand your business and clients better. This kind of knowledge and insight goes a long way towards keeping your organisation agile and competitive in an ever-changing business landscape.
If you’re still operating off core legacy systems, optimising your supply chain may seem like an uphill battle. Instead of expending time, money and other outdated resources on keeping your legacy technology functioning, it’s important that you instead embrace IoT to create a sustainable future for your company. IoT based inventory management will streamline your operations, and offer greater insight into your supply chain movements for easier, more intelligent planning.
From applying key insights related to consumer shopping practices into your demand planning, to harnessing real-time visibility of your supply chain to reduce risk—you can successfully improve inventory management through shared departmental datas and effective inventory control management. Optimising your supply chain today will provide immediate and long term operational advantages, ushering your business into the future.