The supply chain is the multitude of processes that occur before a product can end up in the hands of a consumer. It involves everything from production development to information systems. Meanwhile, supply chain management encompasses the flow of goods or services and the practices that a business utilizes in order to facilitate this flow.
Here’s the question to ponder upon: Why would a company care about such a thing, you might be wondering?
Well, supply chain management ultimately serves to streamline a company’s supply chain. This streamlining is often more cost-effective and efficient, which results in a higher profit margin for the company and a direct edge against its competitors.
To explore more on supply chain management practices, we consult with Keyonda Garry. Keyonda Garry is a logistics field specialist based in South Carolina. Below, she shares her expert opinion on the field, outlining what she believes to be the best supply chain practices under distribution management.
Maintain Positive Relationships With Your Suppliers
Keyonda Garry asserts that an integral part of any successful distribution management strategy is fostering positive relationships with suppliers. Your suppliers are necessary to your business’s supply chain, so rather than thinking of them as a separate entity, Garry recommends perceiving them as a vital part of your own team. After all, in a buyer/supplier relationship, both parties depend on each other.
If you want your supply chain to run smoothly, you must be able to trust and rely on your suppliers. Thus, all companies need to ensure that the lines of communication are open between them and their supplies so that you can work together to make the supply chain the best it can be.
Prioritize Total Cost of Ownership Over Price
For any business, it’s tempting to go with the cheapest option. But Keyonda Garry warns that price isn’t everything. More specifically, she believes that businesses should prioritize the total cost of ownership/consumption (TCO) over price.
TCO considers both the direct and indirect costs associated with a certain product or service. This will allow you to see the big picture, as sometimes the product that costs the least can end up costing more when you factor in indirect costs. Examples of indirect costs include transportation costs, warehousing, and environmental effects.
By making TCO more important than price, you are much more likely to see success in your supply chain long-term.
Utilize Effective Technology
Technologies that will benefit supply chains are being invented practically every month. The key lies in knowing which technology is right for your company.
Keyonda Garry claims that many businesses purchase technology first and then try and figure out how it fits into their supply chain model, when it should be the other way around. Garry urges business leaders to consider the weakness in their current supply chains, and then do research into new technologies that could specifically address these concerns.
Software solutions will only be successful if they are incorporated using this method. One example of a technology that could be useful to supply chains with inventory issues are wearable devices. Such devices are worn by people and use cloud computing, enabling employees to input data and access data instantaneously.
Wearable technology is especially effective when it comes to inventory, as it helps streamline the process of collecting and analyzing data, which then gives companies more control over their own inventory.
Train Supply Chain Staff Sufficiently
According to Keyonda Garry, one of the best supply chain practices under distribution management is to train staff in all areas of the supply chain. Although your employees may have been hired to perform very specific, narrow tasks within the larger supply chain, it is important that they understand how the entire chain works and how their role fits into it. Training your employees so that they understand the “big picture” is critical, shares Keyonda Garry.
Ultimately, staff who are trained properly about all parts of the chain are the ones who come away from training well informed and are much more likely to be productive on the job. It will show employees that they are valued and that they are part of a team, instead of thinking of themselves as just one cog in the wheel.
Appoint Supply Chain Leaders
Supply chains require efficiency if they are to be successful. In order to ensure your supply chain is functioning to its highest degree, a set of supply chain leaders, should be appointed.
Keyonda Garry claims that businesses should identify employees who already take on leadership roles in relation to the supply chain, and from there, should establish a small committee or council whose job it is to handle any supply chain-related issues that may arise. Having an appointed group in charge will lead to better communication with management and more efficiency within the supply chain.
Don’t Forget About Supply Chain Risk Management
Even the most successful supply chains run into problems, shares Keyonda Garry. Thus, supply chain risk management is an important practice that all businesses should take into consideration.
Supply chain risk management will allow you to prepare for unexpected issues that may arise. And unpredictable issues are likely to occur given that so many supply chains nowadays involve offshoring and outsourcing, as well as a wide variety of products.
Meanwhile, the second part of risk management is that it will make your company more resilient to such issues. Your company being able to live through an unexpected event and come out the other side is the key to longevity.
Practices that will make your supply chain more resilient range from forging close alliances with suppliers and distributors to increasing visibility in the supply chain, which in turn allows disturbances to be detected as soon as possible.