Many manufacturing companies spend massive amounts of time and money on developing effective and successful supply chains. However, many of those same companies could not tell you what made their supply chain successful. While many factors contribute to a supply chain’s success, there are several key actions manufacturing companies can take to ensure success and profitability.
The following list reflects the habits of the most successful and effective supply chains:
1. Regularly Update Your Written Strategy
While it may seem like common sense, few manufacturers actually develop a written supply chain strategy. Budgets and objectives are beneficial, but companies need to focus on developing a strategy in order to improve their supply chain.
What, exactly, is a supply chain strategy? In short, it’s a plan designed to help supply chain leaders decide how they will allocate their scarce resources over a period of time. Many companies also include an assessment of their strengths, weaknesses, opportunities and threats in their supply chain strategy. Regularly updating your strategy will help you gain a better view of your supply chain and develop solutions to problems that arise.
2. Align Your Supply Chain with Your Business
Sales and Operations Planning (S&OP) has made it easier for companies to align supply chains with the business. However, companies often lose track of the importance of this alignment due to critical operational pressures and additional factors.
Make sure that those higher up in your manufacturing company realize the importance of aligning your supply chain with the business and make it a top priority.
3. Focus on Employee Development
Companies running supply chains face significant operational pressures everyday; however, businesses still need to find the time to focus on developing employees and their skills. Companies can start doing this by regularly assessing their employees, investing in training and skills enhancement, rotating the most promising managers through multiple job assignments, and spending time developing succession plans for higher level supply chain positions.
4. Become “Fact-Based”
In order to find true success, companies need to develop a “fact-based” culture. Rather than accepting assumptions at face value, employees need to dig for factual evidence. Managers and executives need to stress the importance of fact-based analysis among supply chain teams in order to improve success in logistics.
5. Take Advantage of the Latest Technology
The most successful supply chains incorporate technology into their strategies and warehouses. In fact, the top performers are more aggressive and smarter users of technology because they know that the competitive advantage comes early in the technology cycle. Companies that adopt technology after it has matured are merely catching up to companies who have already mastered the technology.
Effective supply chains also regularly assess their technology implementations to determine if there are any capabilities that they own but are not using or if they should consider investing in additional technology to improve their value.