As a business person, you must be aware that the supply chain is one of the most crucial parts of a business since it entails production, distribution, and inventory. A reliable supply chain will save money and improve customer satisfaction since it significantly reduces product wait time. It is also evident that an ineffective supply chain can be very costly, so how do you create a reliable supply chain? Here are some helpful tips for creating a reliable supply chain
For a supply chain to exist, there must be suppliers since they form the foundation of the whole chain, so the most important thing you must consider is are the suppliers reliable. For a reliable supply chain, you must ensure that the suppliers always deliver on time and the correct order you make.
Therefore, if your current supplier keeps failing to follow through, it’s high time you cut ties with them because unfulfilled promises lead to unsatisfied customers, which causes your business to take unwanted economic hits. Also, you have to consider how quickly a supplier can complete your order and ship it out to you because if it takes a more extended period, it means a longer waiting time. So, it’s best to use a much closer supplier and ensure that the container trucking company they work with is also reliable and fast.
Technology has brought about new innovative business solutions that have automated and fast-tracked business processes, thereby increasing the value and quality of service each customer receives. One of those solutions is warehouse management systems. With a WMS, you can easily track, document, and evaluate the effectiveness of your supply chain. For example, once the goods in the warehouse reach the reordering level, the system can alert you or place an order to replenish the diminishing stock on your behalf. You can also invest in transport management software to track your goods while in transit.
Using historical demand data can help you create a reliable supply chain since it’s helpful in improving your supply chain efficiency. By using demand planning, you can identify when to make a large order and when not to, thus ensuring that you always have enough supply to meet the existing demand. For example, if you are a clothes vendor, by using historical demand data, you can identify what months to order heavy clothing and when to stop that order and switch to lighter clothing. Also, always factor in other factors when planning, such as your suppliers like if you are working with a Chinese vendor, ensure you place your order before the Chinese New Year holiday period so that you get your order in time to avoid incurring extra supply chain costs.
To create a reliable supply chain, you must have a plan on how you will achieve that goal. So, when creating a project, you must ensure that the strategy you are going with must be appropriate for your business type like if you are a B2B company, a wholesale model is the best strategy. Ensure you make good use of the 3rd party logistic providers like if you think your shipping courier is cheaper compared to your supplier’s, use them instead of your suppliers to save and reduce the transportation costs.
Communication is a crucial aspect of business, especially regarding the supply chain, since a slight miscommunication can lead to unimaginable losses. So, when developing your supply chain networks, ensure you pick suppliers that are communicative and always respond to inquiries. Also, it’s vital that you always be clear on what you expect from the suppliers and never be someone who goes back on their word. Since that can lead to your reputation taking a hit, no supplier will want to work with you.
The business world happens to be very unpredictable. You never know when a company may run out of business or cease to exist, so if you want a reliable supply chain, it’s essential to have a fallback strategy. By creating new supply networks, you are insulating yourself, assuring your survival in case your current supplier goes out of business. Also, by creating new networks, you may get even much better deals at favorable prices.
Since the supply chain is very crucial to any business, you must pay it the attention it needs. Remember creating a reliable supply chain isn’t a sprint; it’s a process so take your time to ensure that you do it correctly.