Supply Chain Management Techniques for Better Sourcing
Supply chain management involves the proper handling of an entire production flow of goods and services ranging from the procurement of raw materials to delivering the end result or final product to a consumer. It involves building a network between your company and your suppliers in order to complete the critical steps to take a product or service and deliver it to your customers. SCM is so valuable because it increases competitiveness and client satisfaction. In the modern business environment, SCM plays an integral part in any company’s success.
As a business owner, you have to wear many hats to be able to handle all of the relationships that have to be managed and maintained. From employee relations to dealing with vendors and suppliers, excellence can be achieved when good communication skills are employed to overcome obstacles that may arise over the course of any one of these critical relationships. Developing an effective and successful supply chain is one of the most important goals that any business should aspire to achieve.
Having a broad list of choice suppliers should be of paramount importance to every business around the world. Between handling ever-changing product pricing, disruption in product and service availability due to natural disasters, economic downturns, and changes in supply and demand, supply chain management can seem like a juggling act for owners and managers of companies alike. However, efficiently running supply chains allows firms to quickly deliver products to the end-user for a lower cost.
Supply Chain Management’s basic processes are defined by categories that include planning, sourcing, making, delivering, and returning. Excellent supply chain management can help your business to maintain a crucial equilibrium between demand and supply. It also involves activities ranging from the procurement of materials and then converting them into finished goods to ensure delivery at the right time to reach the end-consumer. Hence, supply chain management should be the cornerstone of any organization. Let’s look at a few key strategies that can help you and your organization to build healthy and productive supply chains with success.
Choose Suppliers Wisely
Vetting your suppliers is one of the most important steps when it comes to creating a functional supply chain. Weak links can set your progress back when things go wrong from choosing faulty suppliers. Create your supply chain strategies and be prepared for anything. Do your research. Interview your suppliers carefully. Don’t settle for second best. Choose the right fit for your organization and then work hard to encourage healthy communication with them.
Have a Backup Plan
It never hurts to have more than one supplier. If an existing supplier suddenly goes out of business, loses competent employees, suffers an economic downturn, or has changes in their supply chain, you should always have a second or even third choice of supplier to be able to fulfill your needs at a moment’s notice. Otherwise, you’ll be beholden to their disruptions in a way that will ultimately trickle down to hurt your business flow. Protecting your supply chain is critical when it comes to being a reliable source for your customers.
Review and Revise Your Strategies
Be prepared to revisit and refine your supply chain strategies. You will have to finely tune your plans to make sure you are on track with your goals as relationships progress. Be vigilant when it comes to reviewing what is working, what is not working, and making it possible to make course corrections as you move into different phases. Having a good plan and following it is as important as being flexible when changes inevitably occur.
Develop Good Metrics
Within your plan should be a lot of solid research on facts used to set and evaluate metrics for how to determine if your relationships are on track. How are your suppliers performing? Are your target dates being met? Are you experiencing communication problems? How are your employees helping or hindering your supply chain management goals? How is the supply chain climate changing from month to month globally? Being in tune with subtle changes and being able to quantify them rationally is one of the keys to developing excellent supply chains.
While browbeating or over-communicating with your suppliers can cause more disruptions than not, regular communication plays a key role in building your supply chain relationships. Also, making sure that the chain of command when it comes to communication is clearly defined and followed can help to save all the wasted time and confusion that can occur when more than one of your staff or management team reaches out to your suppliers to discuss goals or problems. Nagging your suppliers with too many requests can damage the trust that you build over time. So, keep communication clear, concise, and guided by your strategy.
Build Trust Over Time
Trust and mutual respect form the basis of all quality business and personal relationships. Trust is built over time through consistent and clear communication both internally and externally. Uncertainty is created by myriad factors such as conflicting agendas of internal management teams with suppliers and customers. Poor people and mission management as well as lack of leadership skills contribute to that uncertainty. The more uncertainty that exists between you and your suppliers, the less effective your model will be for creating the success that you desire. If trust within and between your management and supply chain teams is suffering, addressing the underlying issues can be not only a valuable investment of your time and energy but ultimately can make the difference between business success or failure.
Forgive First Time Mistakes
People will always make mistakes. It is important to recognize this and while maintaining strict metrics to determine when you are on or off-track in meeting goals, a certain amount of flexibility should be acceptable. Be forgiving of first-time mistakes, while encouraging open and honest analysis of where and when the problems are arising so that you and your suppliers can learn from mistakes in a healthy, collaborative manner. Be aware of the mistakes and look out for repeating patterns to avoid supply chain pitfalls. Be diplomatic in your punishment of such mistakes to avoid supplier alienation, while also holding your suppliers to meet goals successfully.
Always Negotiate Reasonably
Strong arming your suppliers can be devastating to your supply chain relationships. Be careful how you manage these negotiations when looking for the best prices across the board. Nickel and dime-ing your suppliers will ultimately result in alienation and resentment. Take good care in how you approach your suppliers regarding financial expectations. There is a difference between expecting your suppliers to be fair and competitive and offending your suppliers by demanding bargain basement pricing all the time.
Use Online Ordering
Eliminate communication problems by developing and implementing as many online ordering strategies as are available. This will discourage confusion and increase streamlining. It will also help to keep your prices lower when you need less attention from customer service agents to get your monthly products and services procured. Once your system is in place for reordering, you can eliminate hours of wasted time of having your management team communicating all the time with your suppliers. Time is money, so every minute you save of questionable communication will add up over the years.
Utilize New Technology
As newer technology becomes available, make sure to reevaluate your strategies to implement programs that will take advantage of that technology. No matter what kind of business you own, you can benefit greatly when changes make things more efficient for you and your management team. So make sure to check in with your suppliers when you notice ways to make your supply chain more efficient with ever-changing new technological advances.
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Contact us today and let’s build a supply chain relationship that is worth protecting over the years. Let us become your trusted printing and mailing supplier today. Give us a call or send us an email and one of our well-trained, courteous staff members will help you start the process right away!
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