How to improve your supply chain management

Supply chain management is a term rather new. Keith Oliver, a consultant in Booz Allen Hamilton, used it for the first time in 1982, in an interview with Arnold Kransdorff of the Financial Times. His idea was to find a term able to describe in detail the different moments in the process of production in an organization. This included manufacturing, marketing, distribution, sales and finance. Since that time, more than 30 years ago, it is now well known that to design a really efficient structure in this area is very complicated, due to the different factors that it involves, and the multiple challenges that the organization must face. But even though it is complicated, it is not impossible.

Breaking Chain_supply chain management_david kiger
Image courtesy of Valentine Svensson at Flickr.com

Time has taught us many things, and first of all, it has allowed us to identify the main mistakes that companies and organizations make regarding the management of their supply chain. It is therefore important to start by clarifying that a supply chain links several organizations with each other. It starts with those devoted to the extraction and production of raw materials, and finishes with the final customer that employs the products of the company. In this sense, one must notice that all those who provide goods and services for the company and all its clients are articulated thanks to the demand of products that customers may have. To forget that feature is an important reason why some companies tend to look like a mass of processes without a clear objective in mind.

The following tips may help you to evaluate the efficiency of your supply chain, and based on that, to design a plan that lets you take some relevant actions to improve the management that you have of your supply chain.

Know well your supply chain

It may appear obvious for many people, but it is in fact not always the case. You must keep in mind that a successful management of your supply chain heavily depends on whether all the departments of your company understand in a very good way the different components of your supply chain. It does not matter whether those departments have a direct or indirect connection with the supply chain. They must know what it involves, and how they contribute for it to work efficiently.

In consequence, the first task of each department in your company is to identify the opportunities that they have to improve, and how those improvements help your company. It is crucial in this respect that each department be completely aware of the company’s behaviour, but also of the behaviour of the competitors, including those at the local, regional, national and even international levels.

Be a leader, and do not be ashamed about that

Everybody knows that companies are mainly about leadership. Of course this does not imply that the leaders of a company are the only important aspect of the company. But good leaders will lead to good goals. For that reason, it is important that a company has good leaders, and this applies also to those directly related to the processes involved in the supply chain. These leaders must always be looking for new ways to achieve excellence in each part of the process, but at the same time be prepared to face hard situations in order to find the best possible solutions.

Leaders must be aware of the different strengths and weaknesses that a department can have regarding its possible contributions to the supply chain. But a leader must also be patient, and try to integrate new ideas into the processes that already exist in the company. The evaluation of a department directly or indirectly involved in the supply chain depends on the ability of the leaders to identify those things that a department needs to achieve to accomplish the kind of purposes associated with your supply chain.

supply chain management_david kiger
Image courtesy of Simon Berry at Flickr.com

Never forget to identify opportunities, but do not get stuck on them

To identify opportunities is indeed important for any company, particularly because that helps it to understand its supply chain in a better way, and see on what sort of things it should focus at a given time. But the identification of opportunities is nothing if it is not connected to a good strategy of prioritization of those opportunities. Leaders play here a central role, because they are those individuals in the company that have a more comprehensive view of what goals a company attempts to achieve, and how its supply chain may become more efficient to achieve them. Therefore, they can help to determine what things are more important to do in a certain moment, and in which order.

Therefore, prioritization of opportunities is a major component in the tasks that everyone excepts a good leader to do. It can even be a strategy to realize what links of the supply chain are perhaps weak, and what actions can be taken to solve it.

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