Complexity is the enemy of the supply chain

Mike McCreeshGiven the economy is in recovery - demonstrated by rising employment figures throughout 2014 - there has never been a better time to take a step back and look at how well your supply chain is operating.

There will doubtless be ways that further efficiencies can be created and the issue of risk can be addressed and reduced through improving visibility and anticipating problems before they arise.

Managing a supply chain effectively is about much more than simply sitting back and letting it run itself, which is a dangerous way to rapidly lose control. Consistent and effective management of the vendors and issues within the supply chain should be the order of the day.

Various factors influence this level of management, but fundamentally, it is vital to maintain constant visibility throughout the entire length of the supply chain. Focusing on this now, as the economy grows, is essential to ensure there is enough supply chain capacity to meet potential increases in demand. Instilling a significant degree of flexibility throughout supply chain operations is therefore crucial.

However, without forging strong supplier relationships now, or seeking to maintain existing ones, the engagement levels needed to drive good visibility simply won’t be there. This is also an essential element of anticipating issues that could cause knock-on problems throughout the supply chain. Trying to deal with the fallout of a last-minute delay in real time with no clear strategy rarely wins the day.

As distance grows between supply chain partners, the need to establish a framework for measuring performance becomes more important than ever. It is therefore vital that clear KPIs are established with each supplier from the outset and that a system is put in place to consistently check these are being met.

The need to work closely with suppliers becomes even more essential as networks become more extended. But complexity is the enemy and where possible, supply chains should be kept simple and the number of suppliers minimised to a carefully chosen few, based on quality and expertise, and not simply cost.

☛ Mike McCreesh is vice president of supply chain Europe at Office Depot.

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