Turn your supply chain into a competitive advantage

supply chain
Managing a complex supply chain network is a challenging endeavor that requires extensive communication and collaboration with internal and external stakeholders. The construction and maintenance of an efficient supply chain network requires considerable effort; time, money, expertise, industry connections, the development and implementation of technology – these are all inputs that are required to position your supply chain for advancement. Consider the five key focal points below as you explore how to create a competitive advantage through effective supply chain management.

Create Value for Customers

As stated by Bill Gates, "your most unhappy customers are your greatest source of learning". It is vitally important to remain closely engaged with your customers in order to understand their wants and needs. Effective supply chains are intrinsically designed to support the satisfaction of customer requirements. All business decisions must be made with consideration to the resultant impact on value creation for customers. It is important to have a customer-centric mind frame during supply chain optimization and design.

Satisfy Demand

At a most fundamental view, effective supply chain management ensures that products and services are readily available to satisfy customer demand. Demand fulfillment is highlighted by the business adage "you can't sell from an empty wagon". Stock outs lead to lost sales –balance both efficiency and responsiveness through strategic inventory control and demand fulfillment.

Respond to Change

In order to identify and respond to rapidly evolving business environments,organizations must be able to store and analyze large volumes of data. The importance of supply chain responsiveness is highlighted by Hau Lee's "Triple-A Supply Chain" - "First, great supply chains are agile.They react speedily to sudden changes in demand or supply. Second, they adapt over time as market structures and strategies evolve. Third, they align the interests of all the firms in the supply network so that companies optimize the chain's performance when they maximize their interests. Only supply chains that are agile, adaptable, and aligned provide companies with sustainable competitive advantage."

Build a Resilient Network

Effective supply chain management requires strategic risk avoidance,mitigation, transfer, and retention. Many lessons can be learned from the tragic Tohoku Earth quake that struck Japan in March of 2011, as the combination of the eart hquake, tsunami, and disrupted transportation and communication structure led to the greatest supply chain disruption in modernhistory. Is your organization ready to respond if a force majeure event impacts a key business partner? If not prepared, these a typical events — natural disasters, cataclysmic weather, labor strikes, etc. canseverely impact the flow of products and resources. It is imperative to thoroughly understand the different factors of risk, and to built resiliency into your supply chain network through risk-based fulfillment and transportation streams.

Improve Cost Efficiency

All supply chain actions contribute to an organization's financial and economic achievement. It is for that reason that supply chain decisions must be made with great attention to cost efficiency. Explore key cost initiatives that directly relate to improved transportation and fulfillment activities, including the stream lining of stock levels to decrease the cost of transporting inventories,automating fulfillment activities to minimize labor costs, as well as the consolidation of orders to decrease freight expenditures.