7 “Tell-Tale” signs your supply chain is hiding issues

There’s no doubt that business has gotten touSupplyChainGroup - Blog Post Imagegher. Competition and globalization are driving the need to be ‘more-nimble’, better, ‘further-reaching,’ and faster; in an ‘ever-changing’ competitive environment. Consumers increasingly demand more personalization and convenience both at a lower cost; which only an efficient, effective. and modernized omni-channel supply chain can deliver.

While many executives understand the challenges, they are often surprised to discover missing opportunities to improve a solid, seemingly well-functioning supply chain.

Is your supply chain concealing competitive issues, causing costly service disruptions, running out of stocks, or having frequent problems?

Here are seven ‘tell-tale’ signs that your supply chain is in need of further assessment:

1. Increased customer and consumer delivery needs

How well do you service all of your supply chain customers and consumers?

Omni-channel consumer expectations are driving the need for different services and metrics. Your supply chain directly affects the perceived quality of your offered product or service.  Customers are not only looking for good quality but also reliable service in a timely manner and at a competitive cost. Your corporate image is at stake especially if it is another “hoop to jump through” for next day delivery.

Have you made improvements?  As an example, have you added delivery frequency when established minimums are met?  How good is end consumer packaging when required?

2. Dropping sales

Is the supply chain contributing to a lack of competitiveness in the marketplace?  What do your sales and marketing groups see in the marketplace?

Weakness in the reliability of a product or service makes the work of the salesforce much more difficult. The corporate image of the product diminished becoming less attractive.

Are you competitive in the marketplace in customer-measured metrics: absolute delivery time, in-stock positions and are you reliable?

3. Complaints about quality

Is quality built into your supply chain, or do you inspect and correct after the fact or worse after customers raise issues?

You may need to consider a ‘built-in’ continuous improvement process, which constantly will measure, analyze, and improve sub-components in your supply chain. All too often, we see supply chains that are primarily reactive.  Information about the condition of a product that is nearing its’ code date, has spoiled or been exposed to adverse conditions is available only ‘after-the-fact’ when it is too late to take corrective action.

Have you implemented recent changes that improved quality and operational efficiency?—or do your current systems, policies and procedures hinder improvement?

4. Per Unit Benchmarking

Do you regularly benchmark your per unit costs and best practice process comparisons?

If increasing logistics and fulfillment costs raise the price of the product or service, your company has an eroding margin issue. In the short term, consumer needs look to add to supply chain costs, which is an emerging issue for many.

Does your supply chain minimize the amount of movements, touches and the touch time in supply chain transactions with physical components? This will help to reduce the cost and number of potential failure points. Understanding your current and future cost structure at actionable levels is critical for improving operational efficiency.

5. Lack of organization around key customer needs

Is your supply chain organized?

Do different departments and outside partners share information properly or in a timely fashion? Are there groups that dodge responsibility and point fingers? Is there a technology backbone that supports sharing of needed information?

If there are duplicates and redundancies of information it is not only wasteful but creates internal data and process integrity issues that further exacerbate the problem.

It may be time to raise the importance of supply chain management in your organization.  Given consumer needs it is should no longer be viewed as a ‘line-management’ operation. Rising customer expectations increase the importance of these needed improvements.

6.  Excess inventory

Dependable operations, including a short delivery window support low inventory policies. Are your supply chain operations part of the reason inventory is building?

Reliable fulfillment operations can positively impact customer service & business growth without the need to build inventory.

Inventory is typically a cross functional and systemic issue. The solution for many is multiple underlying problems. Complacent supply chains add inventory that undermines an organizations’ ability to compete and prosper.

7. Missing information

Is the movement of information and payment synchronized in your supply chain with the movement of products?

Many times we see a reliance on EDI and MS Excel with multiple manual interventions. Typically, too much of the needed record keeping is captured electronically ‘after-the-fact’, which slows down supply chain operations.

Understanding true information requirements is a critical part of the process. Relying on ERP promises alone in a changing business environment can lead to costly workarounds.

If you have any of these issues and would like to discuss realistic & practical solutions to address them, please contact us at www.supplychaingroup.org.

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Posted in: Supply Chain Best Practices

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