Give your supply chain a four-point health check

19 March 2014 | Allan Blakeley

Allan Blakely, managing director at FedEx SupplyChain EuropeThe supply chain is the network that keeps a business alive. But with so many intricate parts, countless stakeholders and endless products, maintaining a healthy supply chain can prove tricky. So we’ve devised a health check for achieving a high-performing, sustainable, adaptable supply chain in just four simple steps.

1. Supply chain specificity
Every supply chain is different, so what is healthy for one, may not be healthy for another. Taking the particular requirements of your chain into consideration is critical, as a one-size-fits-all supply chain does not promote success. Getting to grips with the specific requirements of your products is important for tailoring your chain appropriately. For instance, in the medical device market, each product may have very different characteristics - adopting a single set of processes could create inefficiencies and surplus stock. Introducing segmentation allows you to map your customers’ requirements as necessary and forecast accurately.

2. A joined-up procurement process
The procurement process can frequently throw up problems in the supply chain. Often organisations have the wrong stock in the wrong locations or simply the wrong stock. Miscalculations of quantities can produce supply chain bottlenecks, create inefficiencies and impede agility, highlighting the importance of procurement and forecasting working together for accuracy.

Maintaining a joined-up procurement process is the responsibility of the internal procurement team and inventory management. So it is critical these teams take accountability for their layer of the supply chain. After all, your logistics provider can’t ship the necessary stock if the correct volume of products isn’t available and if this is the case, your customers won’t receive the products on time. This can have serious impacts on your bottom line: more than 90 per cent of companies say supply chain disruptions have a significant impact on a company’s business and financial performance, according to a report from the MIT Forum and PwC.

3. An ample dose of data
As the pool of data available to businesses grows ever larger, the importance of data and information in the supply chain increases in turn. A clear understanding of customer delivery data throughout is essential. This type of visibility and automation ensures that each layer of the supply chain is consuming real-time data, so that customer demand is accurate and unnecessary stock replenishment is prevented. Smart data usage enables your organisation to be more sustainable and as a result healthier. In fact, according to IBM’s Chief Procurement Officer Study, 83 per cent of high-performing CPOs excel at leveraging analytics compared to just 63 per cent of the low performers.

4. Make logistics providers work for you
You probably already have a logistics provider but are you getting the best out of them? By working with the correct logistics provider and asking the correct questions upfront, you can reap a huge variety of business benefits, ensuring their service supports your own business objectives. Logistics isn’t just about a tick list of costs, it’s about adding value and by describing your supply chain in detail to a potential supplier, it can often spark additional value generation ideas and ensure a more accurate proposal – noticing customer pain points which may previously have gone unidentified.

Whether it’s the physical movement of goods, monitoring inventories in different places or securing access to new locations, there is a whole host of information in play throughout the supply chain. It’s up to your provider to put this information at your fingertips. Make sure you can see where your packages are at any time, what the costs of delays are and how quickly your goods will reach their destination. All of this ultimately equips you to better manage your inventories as well as your business.

☛ Allan Blakeley is managing director at FedEx SupplyChain Europe.

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