Supply chain management encompasses so many areas that go from warehousing and stock management all the way to customer relations and shipping, so saying that there is a proper way of doing procedures all the time would be a mistake. Successful supply chain management is a combination of many practices that must work together as the pieces of a clock in order to yield the correct results that are best for the company.
In this article, here at David Kiger’s Blog, we want to focus on the most common mistakes that are made in supply chain management and how some of those mistakes are often ignored as they are seen as insignificant or simply overlooked.
Overstock of inventory
Even after years of lean practices and inventories becoming a trend, it is still common that suppliers fall for this quite often. There are many different reasons why companies make this mistake; sometimes a product doesn’t sell quite as much or perhaps a promotion in large batches is too good to pass up and you are left with a huge overstock of a particular item. The reduction of inventory level should be made a priority in order to free up money that would otherwise stay caught up in stock for unknown periods of time.
Keeping paper processes
Many small operations believe that it would work better for them if they continue to do things the old-fashioned way and stick to paperwork. Paper workflows are not very efficient, are not environmentally friendly and are less safe and more difficult to safeguard safely for longer periods of time. New software allows for a perfect integration of information storage and warehouse operations in all types of businesses, from the smallest to the largest sizes of supply chain operations.
Having an untidy operation and a messy warehouse can hurt many aspects of your business beyond the obvious safety and health considerations. A space that is disorganized is a space that doesn’t promote efficiency and a smooth workflow for everyday operations. Allocating time and resources to the upkeep of cleanliness and order around the warehouse can go a long way in motivating your workers and utilizing efforts in the best possible manner without having to worry about the tidiness of the work environment.
Not adjusting services to customer needs
Not all customers are alike and therefore, not all customers should be treated the same. That may sound wrong at first, but once you think about it, it makes perfect sense. Not all customers need the same services from you; this is why not all of them should receive the standard treatment package. This allows you to focus your premium and most resource consuming services on the customers that really need them, thus saving money and time.
Lack of effective performance measuring
How can you evaluate your performance if you are not correctly and efficiently measuring your performance? One of the biggest problems organizations find when it comes to trying to optimize their operations is the fact that more often than not, they do not have a reliable baseline to compare performance. When it comes to metrics, there are many different aspects one can measure, so choosing the correct parameters is a task that must be completed methodically, however, once the company has identified what matters in their particular scope, it becomes a matter of upkeep and careful monitoring.
Not investing in personnel
Training is often overlooked because organizations sometimes feel that it doesn’t fit well within their budget. Investing in the improvement of your personnel is one of the best ways a company can allocate money and receive a significant turn around on their investment. It is always more cost-effective to retain your personnel than to fill vacant positions later on.
Lack of optimization in asset utilization
Sometimes the best tools are already under your roof, but they are not being utilized in the best possible manner. Meaningful measurement and monitoring can help you find the best ways to allocate your resources and personnel to get the most out the assets you already have. Continual improvement requires for a company to be vigilant of this aspects, otherwise this can become quite costly if neglected.
Substandard health and safety management
Accidents happen and having the best contingencies in place is key for the situation not to become crippling to the company. Safety management and proper procedures are the some of the most important preemptive measurements a firm can take to avoid health and safety issues; something that can be extremely expensive and even in some cases lethal.
Using one carrier for all shipments
Do not place all your eggs in one basket. While having a wide selections of carriers can help you pick and choose different features from each that may best benefit your operations; you should also think about a company that could go out of business or on strike and how that would impact your own operations.