Why your supply chain model is likely to fail
Table of Contents
- 1 Why your supply chain model is likely to fail
When managing your supply chain, the hardest part is often figuring out the suitable model. What's the best way to ensure you get what you need and when you need it? How do you get the most value out of your supplier relationships?
These are tough questions that every business owner faces at some point in time, but they don't have to be complicated. That's because each business has its unique needs and circumstances.
To be successful at any level, you need to have a good supply chain model. Therefore, understanding what makes up a successful supply chain system is essential.
Optimizing for efficiency
Supply chain optimization is a strategic function that helps you to get the most out of your resources. It's also a competitive advantage, business enabler, and source of differentiation.
Supply chain optimization allows you to:
- Reduce cost (e.g., labor cost)
- Enhance margins (e.g., transportation costs)
- Improve quality (e.g., reducing waste through routing)
Viewing supply-chain management as a cost center
SCM is not just about cost reduction. It's about optimizing the entire supply chain, from planning and forecasting to execution and delivery. If you view supply chain management as a departmental function, your organization will likely fail because it won't have enough resources or personnel to run efficiently.
Suppose you want your business model to succeed over time. In that case, you need an integrated approach that includes everyone in your organization—from executives who manage budgets for products and services to frontline employees who deliver those goods or services.
Dismissing the importance of trust
The initial step in building a successful supply chain is to ensure that you have the right people in place. You will need to know who your suppliers are, what kind of product they produce, how reliably they can deliver it, and whether or not they will treat your customers well.
Not seeing your supply chain as a strategic asset
This can be a big problem because there are many ways in which improving supply chain performance can provide benefits beyond just cost savings and performance improvements:
- It will improve customer experience through faster delivery times or reduced returns rate (which leads to greater customer loyalty).
- It will make employees happier by giving them more time with customers, reducing anxiety about missing deadlines or changing orders as needed, and lowering stress levels for everyone involved!
The key takeaways are that each business needs to build a supply chain model based on its own unique needs and circumstances.
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