8 Tips for Optimizing Your Supply Chain


Having the best products isn’t enough to ensure success; you also need an efficient supply chain behind it. If your supply chain isn’t as great as you hoped, consider these eight tips for optimizing your supply chain so you can stay in business and continue growing your business.

1) Create a Process

Before you even think about optimizing your supply chain, it’s important to look at how you currently operate. Look at every stage of your supply chain and determine where inefficiencies exist. After you’ve identified areas that could be optimized, brainstorm ways to fix those issues.

For example, if freight delays keep products from hitting shelves when they should be there, can you buy and transport more inventory? If shipments aren’t arriving on time because employees are always out sick or taking vacation days, can managers work with other team members to better plan their workloads? Can drivers become more familiar with route information to help them deliver items on time?

2) Set Key Performance Indicators

Key performance indicators, or KPIs, are measurements that identify what is important to your business. In supply chain management, KPIs reflect how well a company delivers on its commitment to customers.

As you can imagine, a wide range of metrics is used to track and analyze supply chain performance — everything from manufacturing output levels to inventory turnover rates. (And yes, other KPIs include measures such as on-time delivery and service level.) Tracking KPIs helps you gauge if your supply chain is meeting customer demands in a cost-effective manner.

3) Use Data Analysis Tools

It’s no secret that many businesses aren’t leveraging advanced data analysis tools to make better decisions. So if you have a spreadsheet full of data and no idea what to do with it, it may be time to add a few more bells and whistles. Tools like Tableau can help you create infographics and reports from your supply chain data, which can then lead to actionable insights that could make a real difference in business operations.

With these types of insights in hand, supply chain managers can implement new procedures or processes that reduce costs, decrease lead times and increase profits for your business—all while satisfying customers!

4) Evaluate Suppliers

When looking at suppliers, you’ll want to think about a few key metrics to evaluate them. Their reputation will likely be important—are they publicly traded? Do they have an A rating with the Better Business Bureau? Are they profitable and financially healthy? And it’s also important to look at how much of your supply chain they can handle. Suppliers are often incentivized to buy as many parts from other suppliers as possible, but you want a partner that will be able to fulfill your orders quickly and competently so you don’t need to spend time managing multiple vendors. At times, suppliers might even help source more components or offer special financing deals if it means locking in business with you.

5) Find the Right Automation Partner

Finding a good procurement companies in USA is critical to success. Companies often make a number of mistakes when selecting an automation provider, including selecting based on process capabilities or price. For example, many people look at whether or not a company has EDI capabilities or if they can provide a direct-to-invoice solution as evidence that they are capable of performing automation well.

While these are important capabilities to look for in an automation provider, it’s just as important to consider how deeply rooted they are in your industry and where you plan to take your business. After all, if you’re looking to integrate with new customers in years two through five, it may not be worthwhile finding someone who has had years of experience in your industry if those relationships won’t benefit you once you’re established.

6) Build Your Own ERP System

If you’re looking to take a deeper dive into supply chain technology, it might be worth your while to take an ERP (enterprise resource planning) system in-house. The biggest benefits of doing so are that you can customize it to your needs and it gives you full visibility into your business. If ERP isn’t right for you, look at other ways to automate your internal systems—especially those that help with forecasting, budgeting, and tracking inventory. The goal here is not just growth but stability; by automating many of these tasks, companies like Amazon have set themselves up so they don’t have to worry about surprises down the road.

7) Take Advantage of Transparency

Find a Contract Manufacturer That’s Transparent: When considering outsourcing to a contract manufacturer, you want to be able to trust that they’ll produce high-quality parts and do so on time. In order to find that trust, look for a company that can offer transparency throughout your supply chain. A transparent CMO will share information with you about every part of their operation, including financials and future plans. You’ll also get access to third-party reports about everything from manufacturing volumes to employee training practices. A transparent CMO is going to be more likely than one who keeps things closed off. If a supplier won’t provide information about its business practices, don’t think twice—find someone else.

8) Balance Benefits and Risks

The way supply chains work, companies often benefit from having multiple suppliers of an item. This allows them to balance benefits and risks: In a situation where one supplier encounters issues (like a factory explosion), it can import goods from another supplier without missing a beat.

 It also means that global sourcing companies have to weigh their options carefully when making decisions; if they decide to do business with a company they believe has questionable ethics, they may not be able to find a backup vendor easily. Instead of buying direct from manufacturers, consider working with distributors who can act as intermediaries. This doesn’t necessarily give you less control over your supply chain; in some cases, you may even have more because distributors have closer relationships with manufacturers than end-users.


Please enter your comment!
Please enter your name here