How to Optimize Your Supply Chain: 7 Simple Tips

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Supply chains are what make the world go round. Your company could be a retailer, manufacturer or distributor and it’s an integral part of the process. Global events like a pandemic or a war can upend the supply chain on other continents. Despite those events working against you, these seven tips can optimize your supply chain and make it work better for you.

1. Visibility

One of the primary ways you can optimize your supply chain is by increasing its visibility. You want to be able to track your products when they’re in transit and have real-time information on your inventory. Accurate data leads to better customer service and improved control of costs. Reduced visibility means disruptions, leading to wasted time dealing with preventable problems.

Efficiency is the name of the game today and supply chain visibility is a requirement for a well-functioning system. There are multiple ways you can increase visibility, depending on your business and industry. One strategy that can work for various companies is integrating systems. Connecting your people with your machines, software and information creates efficiency and a holistic view of how they work together.

2. Green Strategies

In today’s world, sustainability is on the minds of many people. Climate change’s effects have become apparent worldwide, so companies and people are starting to find ways to become more environmentally conscious. Some businesses have begun implementing greener practices to meet consumer demand. Most people are willing to spend more money on sustainable products than they were in the past.

Going green in the supply chain makes sense for consumer demand and your business model. Eco-friendly practices can make you a more viable partner for your supply chain partners, ensure your business can last and positively impact the environment.

One way you can make your supply chain greener is by reducing the amount of packaging your business uses. Streamlined packaging can lower costs and save space in your inventory by using fewer materials. For the packaging itself, you could consider renewable options.

3. Supplier Communication

When optimizing your supply chain, one of the first places you should look is your supply partners. Is your manufacturer consistent in their product quality? Does your supplier deliver goods consistently on time? Are your retailers punctual with communication and feedback? Communication is a critical part of the supply chain.

You must be sure your partners can support your business or you should start looking elsewhere. Speed is a critical factor in today’s business world, so you need to be able to rely on others. Communication is vital with purchase orders, deliveries and more because backlogs can throw off your entire supply chain, especially in times of high demand.

4. Telematics

Commercial trucking is a bedrock for economies in the United States and worldwide. The world needs truckers — without them, supply chains would suffer significantly. If your business has a fleet of trucks, you know how integral trucking is for your suppliers and retailers. Backlogs and delays are common these days, so one way to mitigate them is with telematics.

Telematics is essential for long-haul truckers because it combines informatics and telecommunications. The devices can track driver habits like speeding and phone usage to increase safety. One of the primary advantages of telematics is route optimization. Traffic can play a significant role in delays, so using route optimization solutions can improve fleet efficiency and even reduce fuel expenses

5. Outsourcing

Modern supply chains have evolved where your business operates better if you don’t do everything in-house. Outsourcing takes some supply chain elements out of your control, but your company could thrive if you find reliable partners. You could outsource your customer service department, logistics and more to create a more cost-effective model.

Operational costs are one of the driving factors of outsourcing. If you do everything in-house, you’re paying for the infrastructure, staffing, overhead and other expenses, putting your profitability at risk. Customer demand is a high priority for businesses, so you may need to consider outsourcing to keep up. Third-party suppliers can bring better tools to improve efficiency and produce better results for all involved.

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6. Automation

Taking some of the stress off your business can help craft an efficient supply chain. But what about taking humans out of the equation entirely? Automation has become a growing force in many industries as companies look to optimize their processes. There are some risks involved with automation, but it seems to be the future of manufacturing and the supply chain as a whole.

A practical place to start with automation is your menial tasks, including document processing. If you have employees who handle this, you could invest in technology to automate this process. Then, you can move these workers to another section of your business where humans are more necessary.

Using machines increases productivity and efficiency in your processes and can improve safety. Automated technology can be more accurate than humans and quickly detect when something goes wrong.

7. Internet of Things

A constant theme in supply chain optimization is making things more efficient. What steps can you take to save hours, minutes or seconds on daily processes? Another way you can improve efficiency and output is by using the Internet of Things (IoT). IoT gadgets have become irreplaceable assets for businesses worldwide because they allow you to optimize visibility and streamline processes.

One sector where IoT helps significantly is the automotive industry. Manufacturers can use IoT devices like sensors on their vehicles after shipping them out. These gadgets can send back data in real time. Combine the IoT with artificial intelligence and companies like Volvo can reduce the repair time by 25% for the trucks they sell. The reliability of their vehicles means more uptime for drivers and less time in a repair shop.

Setting up Your Business for Success

In the past few years, the supply chain has become a hot topic in the past few years. The pandemic has taken a toll on industries by slowing processes and causing backlogs. Wars among countries and boats getting stuck in canals can also cause disruptions. Follow these seven tips for optimizing your supply chain to keep up with today’s ever-changing global economy.

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