Managing an effective supply chain is a crucial aspect of running a successful business, and with significant global supply chain issues expected to continue this year and possibly beyond, it is a key area of concern. Industries from automotive to telecommunications and even aerospace have been significantly impacted.
In today’s post, we consider the critical importance of building and maintaining a strong supply chain management system, and offer a few strategies to help keep your supply chain resilient throughout the current crisis and beyond.
A supply chain refers to the movement of items from raw materials to component parts, and ultimately to the goods or services to be supplied to an end consumer. Therefore, supply chain management is the way in which a company handles and organizes this flow.
A simple supply chain includes, at the very least, a manufacturer, its suppliers, and its customers. In reality, and depending upon the complexity of the business and its products or services, a supply chain may include numerous additional steps and stakeholders. Supply chains vary enormously in their size, formality, and level of complexity, and a large company may be a part of many different supply chains.
For example, here at Fastbolt we supply products including industrial fasteners, PCB assemblies and magnetics, industrial safety supplies, and much more to clients in industries as diverse as military and aerospace, telecommunications, consumer products, and alternative energy. A fastener begins life as a raw material, such as a metal ore. Myriad steps take place between that ore being mined and a finished fastener rolling off a production line and being sold to a customer, who will then use that fastener in the construction of, for example, an airplane, a car, or a piece of medical equipment.
The purpose of supply chain management is to ensure that the correct items reach the correct place when they are needed. A robust supply chain management system eliminates production delays caused by sourcing problems, reduces waste, forecasts demand to maximize revenue, and optimizes efficiency.
Many business owners understand the importance of a strong supply chain and a robust management system, but may not know precisely how to implement one. There are numerous systems available, each with its own advantages and disadvantages.
In this section, we offer an overview of three supply chain management systems that have been proven to be effective and efficient.
In a vendor-managed inventory system, a business outsources many supply chain management tasks—such as ordering, tracking stock, demand forecasting, and pipeline management—to the vendor (or vendors) from whom it buys its inventory.
VMI can be a cost-effective and time-efficient way to optimize the supply chain for your business, allowing you to build a long-term, trusting relationship with your preferred supplier(s). VMI suppliers are experts in supply chain management, and the right provider will take the time to develop a deep understanding of your business and its unique needs. As a VMI supplier, we work closely with our clients to anticipate demand and make decisions based on robust forecasting data.
VMI can also reduce the ordering cycle time, reduce the risk of downtime due to unforeseen supply chain delays, and mitigate the risk of wasted money through over-ordering.
It is possible to keep track of inventory manually. However, it is also often time-consuming and inefficient to do so. In addition, a manual process is always at risk of problems caused by human error. Fortunately, technology in this area has advanced greatly over the past few years, and there are now countless technological solutions to choose from to help you manage your supply chain effectively.
Smart technology solutions for supply chain management vary in cost and complexity, and different solutions will be appropriate for different businesses. Here are some examples you may wish to consider, depending upon your business needs:
Barcode scanners allow you to connect with your vendor’s system. When you receive your order, you can scan your items quickly and easily to ensure that the correct items and quantities have been delivered.
Enterprise resource planning (ERP) software solutions help organizations of all sizes collate and utilize business data, make smarter decisions, streamline various workflows to maximize efficiency, and integrate different systems into one platform. ERP software can also help tremendously with your supply chain management needs.
A good ERP solution will allow you to track inventory and orders, as well as undertake financial forecasting and build reports to enable you to make the right sourcing and ordering decisions.
In business, no matter the industry, data is one of the most powerful tools at your disposal to gain unique insights into your processes and systems. You can then leverage this information to make the best decisions for your company.
By making use of artificial intelligence (AI) and machine learning, companies can use powerful algorithms to sort through enormous sets of data, view trends and patterns, and use this information to increase the efficiency and effectiveness of your supply chain management.
AI systems can handle data at a volume and speed that would be impossible for human users. Their algorithms can also predict future patterns based on past data to allow for smarter planning and, ultimately, greater productivity and profitability.
Do you have a system in place for replenishing important items when they are running low? An embedded scanning system allows your team members to scan a bin when stock is running low, and automatically notify the relevant individual or supplier that the item needs to be reordered.
It is even possible to connect your bin scanning system directly to your supplier’s ordering system, cutting out manual ordering entirely. This saves time, puts more control directly into your employees’ hands, and ensures that you will not run out of an essential item at a critical time.
An integrated supply solution allows you to outsource various aspects of supply chain management, from product sourcing and order processing through to delivery, logistics, and returns, to a third-party company.
Working with an integrated supply chain management provider comes with numerous benefits, including consolidated ordering and billing, a comprehensive data and reporting system all in one place, and countless hours of time saved in-house. Though the upfront investment is significant, many businesses find that partnering with an integrated supply chain management provider ultimately saves them money.
Working with an integrated supply chain management provider allows you to build a long-term partnership that can grow and evolve along with your business. An experienced provider will also have the extensive industry knowledge and contacts, which they will leverage to find the most cost-effective, efficient, and reliable solutions for their clients.
No matter the industry or company size, supply chain management is a crucial aspect of business success. Not having access to the right products at the right time can be disastrous—financially, logistically, and reputationally. In some sectors, such as military and medical applications, supply chain issues can also have serious safety ramifications.
Fortunately, numerous solutions are available to help companies manage their supply chains effectively. Whether you choose a vendor-managed inventory (VMI) solution, a partnership with an integrated supply solution provider, or management of your own supply chains in-house with the help of appropriate technologies, optimizing your supply chain will strengthen your business and allow it to withstand current and future supply chain crises.
Here at Fastbolt, we are proud to be a trusted supplier of key inventory for many industries, as well as a provider of supply chain management services throughout North America.
If you would like to learn more about how we can work together to support your business in optimizing every aspect of its supply chain, please contact us and a member of our team will reach out to you soon for a no-obligation discussion.