Category: Supply Chain Management
4 Ways to Strengthen Your Supply Chain
Companies strive to minimize transport costs and maximize the ability to meet the needs of their clients to achieve success in their business. The most crucial step in this process is to execute an effective supply chain management system. This involves managing products to be transported, ensuring the correct method of transportation is used and establishing the most cost-effective route between the origin and the destination. These factors determine your capacity to derive value from using a supply chain management system.
In any good system, you ought to be able to measure performance and execution; otherwise you will not be able to assess whether value has increased or decreased in your company. Benchmarks are set to determine the acceptable limits of performance pertaining to different business environments. Try to follow these four guidelines to ensure your supply chain is operating smoothly:
Don’t Delay Your Delivery
Any company that implements supply chain management typically guarantees reliable delivery of raw materials and finished goods through use of a bid, which outlines job parameters and expectations upfront. This involves a close working relationship with suppliers, customers, shippers and warehouses. If any of these parties fail to perform their role on time, it is likely that the entire process will be delayed, resulting in direct consequences on all the parties involved. Establish your deadlines early on and monitor production schedules to ensure a reduction in delays.
Keep Strong Relationships
Another fundamental component in having an effective supply chain is to have lasting relations with suppliers and customers. This means you should have stable prices available. The inability to guarantee stable prices for a final product is typically associated with an increased cost of doing business, increased material costs and the transportation necessity. This can make it impossible to maintain product prices. You should detail the factors that cause such internal and external price fluctuations. Include these factors before a final price is set and take them into account when developing ideas and negotiating deals.
Break Down Your Information
In an effort to guarantee a seamless supply of raw materials and finished goods, companies enter into agreements with stakeholders to deliver different types of cargo on specified dates or at certain inventory levels. This eliminates the need to recurrently place orders for such goods, which also removes incidents of stock-outs and subsequent lost sales. However, there are times when the suppliers may deliver goods at the wrong time or place, or deliver entirely the wrong goods. This is a failure of coordination in the supply chain and can have devastating effects. Pre-planning schedules and offering verification checks can help to diminish stock-outs or production of poor quality goods due to use of improper inputs.
Streamline Your Technology
Any manufacturing company that desires to have an efficient supply chain must monitor various production costs to guarantee that they remain within manageable limits. This can involve integrating systems, with your chosen 3PL. Doing so can provide for optimal inventory levels, ensure orders are processed quickly and accurately, tracking is internally transparent, and back office accounting is streamlined. A reliable logistics service provider can help to minimize delays and damages, which are other key outlays in supply chain. Switching transport responsibilities between providers often involves a change in processes, therefore integrating with a technology driven partner can save time and money year over year. By streamlining your supply chain management through the help of a dependable shipping partner and cohesive technology, you can stay one step ahead of the competition.
Every company should strive to take these tips into consideration to demonstrate a reliable supply chain that integrates various stakeholders and resources to guarantee the quality, price and reliability of the entire system. If a firm overlooks negative signs that show inefficiencies in such systems, there is high likelihood that these systems may fail in the long run. Automation paired with having a fully-fledged supply chain department can help manage the supply chain effectively, and in turn, success should shine through in your business.
Top Four Reasons to Partner with a 3PL
A third party logistics provider (3PL) offers outsourced or third party logistics services for part of or all necessary supply chain management operations. 3PL’s typically specialize in warehousing and transportation needs that can be customized to a customer’s requirements. As a business decision maker, there are many benefits to partnering with a 3PL.
Did you know that over 82% of Fortune 500 companies partner with at least one 3PL? Here are the top four reasons why:
- Peace of Mind: Knowing that you have a professional partner on your side to manage the transportation of your goods will allow you to focus on other operations. Look for a 3PL with years of experience, professional service and the resources to get your items from point A to point B on time and undamaged.
- Risk Reduction: If you choose transportation carriers on your own, it can be easy to overlook important factors such as operating authorities, insurance information and safety ratings. Utilizing a 3PL ensures that you won’t put your freight in the hands of an incompetent carrier. STC standards of excellence and rating systems are imposed to safeguard against ineffectiveness.
- Time is Money: Do you really have the time to route, track and manage day-to-day issues that arise from your freight? Many little issues can arise in logistics and 3PL providers have dealt with it all. Electronic transfers of data can minimize inaccuracies and provide real-time updates throughout the duration of your shipment.
- Speaking of Money… 3PL providers have an eye for logistics. They can arrange your freight, consolidate LTL shipments and recommend unique solutions that you may not have thought of before. Having the ability to find a different, yet better way to ship your products is a valuable asset that a 3PL can offer. Look for a provider that can provide assistance for your unique freight shipments.
STC Logistics has industry expertise and a reputation for quality. We provide expert consultation and have relationships with a vast network of nationwide secure cross-docking facilities. If you are considering hiring a 3PL company, you should analyze some key areas of your shipment needs to determine what your logistics partner should provide. Download the free resource, “Hiring a Third Party Logistics Company,” by clicking here.
Hire Top Talent for your Supply Chain Management
If your business heavily relies on your supply chain and logistics, recruiting and managing top talent is critical. As we head into 2013, having talented logistics professionals on-hand as a resource is crucial to growth.
The Bureau of Labor Statistics recently projected an increase in the need for transportation and logistics management workers. This is mainly attributed to the number of individuals in the industry who are retiring or transitioning into new fields. Overall, high-level logistics management employment will grow by seven percent within the next seven years. This growth will result in the need for programs that educate potential employees; a skilled workforce will be required to fill these open positions.
Education for the logistics workforce goes beyond entry-level workers. C-level executives should have specialized knowledge. It’s important for logistics professionals to be knowledgeable in tactical, strategic and operational areas. Simply having a basic knowledge of supply chain and logistics may not be enough.
Recruiting and managing internal logistics and supply chain management workers may not be the most cost-effective option for your company. Instead, consider hiring a third party logistics provider. These companies specialize in transportation and are able to deliver superior, flexible solutions for an organization’s transportation requirements.
Third party logistics providers have extensive networks of resources and a total dedication to your supply chain. They are able to keep a watchful eye and manage your freight shipments while you focus on running your business.
The right logistics provider acts as a valuable extension to your business. This will allow you to focus on your core competency.
If you are interested in hiring a third party logistics company but are unsure of where to start, click here for a free checklist. This free download will allow you to analyze the key areas that a logistics partner should provide.