THE NEED TO IMPROVE SUPPLY CHAIN OPERATIONS
Why Is it Important to Improve Supply Chain Operations?
Let's use an example to illustrate the importance of improvement for SCM systems. Let's assume a delivery company, which uses a truck to deliver products from place A (warehouse) to place B (companies in a given postcode) regularly. The truck should follow a set route to reach the destinations efficiently, saving time and fuel. On the day of delivery, planned maintenance works at the specific neighborhood entrance rendered road access impossible. The truck driver had to figure out a different route to enter the neighborhood and locate the specific companies from a different entrance point; hence the optimized route was replaced from a "let's see which road this is, which company is located here expecting" chaos. The businesses got their orders later than expected, and the truck used more fuel than anticipated. This could have been avoided if the company had liaised with the city council for information on scheduled maintenance or more than one route planned in case of emergency. This simplistic example can explain why SCM needs to constantly strive for improvements, if not for satisfying their existing customers, to get ahead of the competition. Having alternative systems in place in case of emergency, trying to foresee situations that can cause disturbance of the existing SCM system, and streamline workflow and business logic to stick to timelines and budgets are signs of B2B supply chain operations are constantly being improved. For eCommerce SCM, there is an ongoing need for improvement. This area is still relatively young and constantly developing, which grew unexpectedly fast in light of the effect of the Covid-19 pandemic in multiple business sectors.
The process of improving supply chain operations is not a short one that can be concluded in a couple of stakeholder meetings. It is an ongoing process, which means it should be reviewed, altered upon feedback, molded to the company's behaviors, or even used as a game-changer for its behavior. Think of it as self-development. It does not stop after the first promotion or the first course to build new skills. Having a good project plan is essential and sticking to it is critical. Setting goals and objectives for the company that can be translated to improvements on the supply chain is a great first step. Past this point, there are a few other things that can help towards eCommerce supply chain management improvement.
Become aware of all costs: a supply chain can have multiple parts of a company involved along the way (orders, inventory, manufacturing, customer service…), collaborating, or external collaborators (suppliers, distributors…). Each part or relationship has its expenses, which are gathered up under individual or collective budgets. Suppose all managers or key employees were made aware of SCM expenses of other parts of the company than their own. In that case, it could help with cost transparency, savings by potential budget merges, and expenses consolidation.
Maintain a good relationship with suppliers and distributors: both parties can be crucial in business sectors such as healthcare, manufacturing, food. Having a long-standing and good relationship with them can be very helpful in unfortunate events or unforeseen circumstances. Having personal relationships rather than strictly professional can motivate people to go the extra mile and help out and be happier working with each other. That being said, collaborators should be audited for their performance, and personal relationships should not stand in the way of honest reviews.
Consider outsourcing: many companies keep many parts of the supply chain in-house when they could outsource some of them and save time and resources. Having a clear idea of the company's core strengths and focusing on them, rather than running around tasks outside in-house expertise, can help a company be more successful by doing more of what they know best. Hiring external collaborators for other tasks can accelerate processes and overall improve SCM by combining expertise.