Supply chain management is a strategy

A good supply chain management strategy is vital to your business, and the massive disruptions COVID-19 continues to cause have proven this time and time again. The companies that have been the most successful throughout this chaotic time are the ones that have oriented and designed their supply chain processes and networks in a way that best serves their final customers. This is a strategic process that is accomplished by tearing down departmental silos and integrating the entire process from suppliers to customers. This trend has become increasingly common, but COVID-19 has caused it to accelerate.

Supply chain management strategies must create value

Customer satisfaction is extremely important and having effective supply chain management is the best way to create value for your customers, vendors and employees. Supply chain professionals need to know the what and the how of executing operations so you can determine your true capabilities and potential. Defining your supply chain strategy by performing a detailed, function-specific analysis from the bottom up is not feasible for most organizations. A better solution is to use a framework that allows you to collaborate with key stakeholders on strategy, priorities and more.

A great use of resources is appointing someone to a supply chain strategy position who can spearhead a strategy that aligns with your end user. When initially mapping your strategy, you must first understand the internal and external context of your supply chain and its capabilities. Your planning must incorporate the development of capabilities and resources like organization, procedures, data and technology. Lastly, you need to find consensus across the entire supply chain and secure buy-in from your stakeholders. Your strategy needs to encompass and shine through in every aspect of your supply chain from planning and sourcing to returns and additional services.

Technology can be the biggest supply chain strategy mistake

Technology is often a great tool for companies who have mastered supply chain strategy and transparency. However, the biggest mistake companies make is that they don’t understand that technology solutions should enhance their capabilities—not replace them. There is no point in investing in expensive optimization, forecasting, machine learning or collaborative software solutions unless you already completely understand your supply chain and any existing and potential issues.

Often, the biggest obstacle to the adoption of supply chain management technology is that performance can take a hit. This can happen if the technology is significantly upgraded at the same time other changes are happening with processes and people. Efficient technology can do wonders for a business when done right, but it can also uncover existing bottlenecks, errors and other problems if it’s not properly supported.

A common scenario is that companies embrace automation, but concurrently cut talent and training budgets—causing underlying problems to increase. Employees are frustrated by technology they don’t understand and haven’t been trained on, and bottlenecks are found that no one knows how to resolve. This can actually make processes slower and cause relationships with carriers, suppliers and customers to be neglected. Technology can be a great asset for any company, but it’s extremely important that it is implemented strategically and with a realistic timeline, so you can make sure it’s helping your business in the long term instead of hurting it.

Supply chain resilience is key

COVID-19 has brought supply chain management strategy to the attention of consumers in a new way, as people experience empty shelves and shortages of items that had been readily available. Effective supply chain managers have done a great job of adapting to deal with this massive disruption and reconfigure global supply chains. Those who have been the most successful in pivoting operations will be the front runners as we move forward with technological advancements. 2020 has illustrated that building resiliency into supply chains where possible is a great strategy to ensure you are prepared for any unforeseen disruptions.

Let ITS Logistics help with your supply chain strategy

Aligning your process with the end user, improving supply chain design and visibility, implementing technology in a way that actually helps, and building resiliency into your supply chain seems like a lot of work. And doing it in a way that helps improve the efficiency and overall effectiveness of your supply chain can take years of expertise and trial and error. Luckily, at ITS we have that experience and expertise in supply chain management strategy. We have custom technology solutions, continuous improvement, and experts who can help run your distribution and fulfillment services in the most effective way possible while improving your bottom line. Give us a call today to see how we can align with your supply chain strategy.