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Three Important Objectives for Supply Chain Optimization

Growing customer demands require businesses to pay careful attention to supply chain management. Supply networks have become increasingly complex thanks to cost-effective sourcing, customization and globalization. Supply chain optimization is essential to meeting market demands in a volatile economy. Here are three goals for organizations seeking to optimize their logistics.

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Staff and Structure Effectively

Your supply chain should be organized and populated in a way that maximizes efficiency and efficacy. An effective organization will be structured strategically. This means not only having an overall plan, but also staffing your business with personnel that are strategic, whose goals align with the larger plan. In such an approach, all business divisions, regardless of function, unify behind a clearly defined vision. All personnel leverage individual skills to execute this vision.

Streamline With Technology

A progressive organization must determine areas where technology can streamline and improve processes. According to 4 out of 5 surveyed organizations, manual procedures were viewed as the main cause of lack of supply chain visibility and inefficiency. To be clear, your processes should not be driven by technology, but rather, supported by it only where there are inefficiencies. For example, consider loading shipping containers for product distribution. An audit of existing loading methods may show that containers are not being loaded efficiently and the use of container loading software online would provide significant benefits.

Don’t Be Ruled by Price Alone

It may seem logical to choose suppliers based solely on price; however, best procurement policy requires consideration of the total cost of ownership (TCO) of a product or service. Look at the big picture when selecting a supplier. What is the overall cost when you consider operational, storage and delivery charges also?  Procuring a good may only be 25 to 40 percent of the overall total cost.

To face future demands head-on, a business must optimize its logistics. This is not only important to your bottom line, but also to maintain market share and competitive edge. Effective organization, technology-aided streamlining and considering TCO are three proven steps towards boosting supply chain management.