Oct 16, 2012
By Mike Croza, Managing Partner of Supply Chain Alliance Partners & featured expert on Episode 1, Season 2. Find out more about Mike Croza
Any organization that manufactures, distributes or retails relies upon a functioning supply chain. Most business success or failure can be linked back to how well the supply chain is performing. So what does a "well oiled" supply chain look like and how can your business ensure it runs smoothly?
1. Understand your customers' requirements
So many businesses fly blind unsure of when, what and in what quantities their customer wants and needs their products. This can add significant staffing, shipping, and inventory costs. To avoid the pitfalls of reactive supply chains, businesses should invest in a process that works to predict customer behaviour and input.
2. Develop strong customer service and operational processes
Developing policies that drive excellent customer service is another cornerstone for solid supply chain management. Many companies don't have downstream and aligned customer facing service policies, which can help in the planning of purchasing and production schedules. Without this alignment, customer service becomes a challenge for companies to know what they should be stocking and to find operational efficiencies.
The marketplace is flooded with a vast array of supply chain software solutions, but companies need to avoid throwing a new software solution on top of broken and dysfunctional processes that have evolved over the years. This approach is one that rarely meets success. Take the time to fix those broken supply chain processes, re-designing them with a best practices view that is appropriate for the business and have new systems make the job easier for employees.
3. Establish performance metrics
The purpose of establishing and communicating how the business measures itself and its performance is the gate-keeping mechanism that balances customer needs with profit. Establish meaningful metrics and measurements aligned with your customers' view of how your company is performing. This helps drive and incentivize the behaviour of the people that work in your company and the suppliers that provide products and services to your business. Absence of metrics, measuring the wrong things or too many things can provide an inaccurate picture of the business and incentivize the wrong behaviour both internally and externally.
4. Show strong leadership and build high-performance teams
Business does not seem to be getting any easier these days. The global financial situation, our high Canadian dollar, the absence of the skills and capital to properly fund and grow a business are all constraints and considerations in today's economy. Most business no matter what your business is, are about the people in your company. Being able to attract the best and brightest, to keep them engaged and challenged and create a high performance culture all starts with the people who own and run the business.
If you condone poor performance, dysfunctional behaviour, poor communications and standards, your organization and the supply chain that links your suppliers through your business to your customers will not be aligned or operating effectively.
Make your supply chain be as integrated and as high performing it can be, and your customers, suppliers, employees, and most importantly your bottom-line will be all the better for it.