More than ever before, it is becoming absolutely business critical to focus on extracting the best possible performance and efficiencies from your supply chain. Quick delivery, item traceability, and courteous service are now baseline expectations.
To lift performance of any system, you need to determine not only your end-to-end performance, but also identify bottleneck points. The maximum throughput capacity at your bottlenecks will fundamentally impact your overall supply chain performance.
In addition to specific bottlenecks that might need more capacity or faster processing speed, you should also aim to lift overall supply chain performance and capacity by implementing systemic improvements and adjustments to workflows.
Here are 5 tips for systemic improvements that can help you dramatically lift overall supply chain performance.
1. Cross Docking
For situations where your supply chain involves distribution to a large number of regular locations, a cross-docking terminal used as a distribution hub can lead to a dramatic improvement. Items enter the cross dock on one side and only briefly remain in the dock before being loaded directly to outbound transport on the other side. The result can be lower lead times, less handling, lower transport costs, and more efficient transportation.
2. Data quality
Shipping, invoicing, and payments require large amounts of documentation. Data quality problems can quickly lead to shipping errors, mis-allocated inventory and unpaid invoices. Serial Shipping Container Code (SSCC) labelling can be used to electronically track any “package” of items within your supply chain, providing trace-ability.
Electronic Data Interchange (EDI) gateways and cloud-based services allow the secure, automated exchange of eInvoices and shipping documentation with both suppliers and customers. These technologies can also be directly integrated with ERP systems and other business software systems, ensuring no human data entry is required, eliminating most data quality problems and removing paperwork-based bottlenecks.
3. Carrots and Sticks for suppliers
Contractual KPIs can be used to improve performance by making adjustments to timings of supplier deliveries. This is common practice for large retailers to reduce delivery lead times and therefore the amount of inventory held, while ensuring predictability in the supply of goods.
4. Real-time visibility and analysis
Technologies such as scanners and Internet of Things (IoT) sensors are able to generate a huge amount of real-time data regarding the flow of items within your supply chain. Up until recently, many organisations still used “batch” data collection and reporting, which effectively meant that it was only possible to detect problems in the rear-view mirror, hours or perhaps days afterwards.
For many organisations, real-time (or nearly real-time) access to datasets can allow better traceability and customer service for clients, in addition to making it possible to apply predictive analytics to detect and avoid problems before they cascade into bigger issues.
There's a common misconception that EDI is slow and outdated, but new transmission protocols allow companies to view their data is near-real-time.
5. Multiple supplier strategies
Whenever possible, ensure there is competitive tension for key items in your supply chain. While this may seem a little like a procurement issue rather than a supply chain issue, real-time supply chain visibility offers the chance to have automated trading strategies which adapts sourcing as supply chain issues occur – without human intervention.