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No matter how well each team performs its job, a shipment can still be late. But what if the supplier is delivering on time, the warehouse is processing orders quickly, and the carrier is running to their own schedule. But even one weak link on that chain can slow the process down.
It is the time businesses need to move away from single task orientation. How suppliers, facilities, technology, and transport partners interact defines a robust supply chain network.
Where Do Delays Begin?
Bottlenecks are a major source of many supply chain problems. These happen when one segment of the network cannot keep up with the rest.
Common warning signs include:
- Orders take too long before approval
- Stock sitting in the wrong place
- Having a single supplier for multiple facilities
- Trucks leaving with unused space
- Warehouses with sub-optimal (not full − not empty) operations
- Customers receiving different delivery times
A bottleneck can seem like this small thing. In the long run, though, it then raises labor costs, creates gaps in inventory, and erodes brand trust.
Do Not Just Follow the Product Rather Follow the Whole Process
Tracing a product from source to consumer is an effective way of reviewing a network.
Start with the supplier. Next look at production, storage and transportation, order processing and final delivery. At each stage, ask:
What will go down here and how could you halt the next stage from happening?
Doing that exposes delays across departments. It could also indicate that teams are operating on different systems or making decisions without up-to-date information.
Making Data-Driven Decisions
To enable a modern supply chain network, you need accurate data. Businesses have bigger things than sales figures and inventory totals. Connections speed and stability should also be considered by them.
Useful measures include:
- Supplier delivery accuracy
- Order fulfillment time
- Inventory turnover
- Warehouse capacity
- Transportation cost per shipment
- Return and damage rates
- On-time delivery performance
Such figures can demonstrate whether a facility needs additional stock, whether a supplier requires support, or if a delivery route ought to be modified.
Do Not Solve One Problem by Solving Another
It may improve one area while aggravating another. Increasing the number of warehouses may be able to reduce delivery time, but will increase rent or cost of labor and inventory.
Consider the full impact before making a major change. Consider:
Cost
Will it cut total operating costs, or just move them somewhere?
Speed
Whether customers will get their orders more quickly, or whether another link in the supply chain has created a new bog instead?
Flexibility
Is the network flexible enough to respond to seasonal demand, new products, or supplier disruptions?
Control
If teams will have visibility in order to govern the new structure?
Keep Improving the Connections
It is NOT a single project, network optimization. Order patterns, customer locations, and supplier performance fluctuate across seasons, as do fuel prices.
Perform regular review of the network and test minute enhancements before making substantial investments. When businesses can capture every single datapoint at each point of connection and make note of bottlenecks, they are capable of constructing a supply chain network that is both change-ready and efficient.
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