Although there are many ways you can mess up your supply chain, here are three areas that, when sufficient attention is paid, will put you in a much better position. It is amazing that these items are not yet adopted universally.
Not Using Available Data
We’ve been inundated, virtually crushed, by the sheer amount of Big Data and the attention paid to it for the past several years. While there are substantial benefits to big data analysis, it can be challenging and at times overwhelming. The main challenges include:
- Lack of necessary skills
- Shortage of qualified personnel
- Protecting customer privacy
- Ensuring data security
Every year there are surveys asking companies about the status of big data use in their business. Approximately a third of companies globally say there aren’t sufficiently compelling business cases or their business processes are not yet sufficiently mature to implement data usage.
Is this true? Or could this be a reflection of fearing change or of businesses lacking funds?
Why are these companies missing the proverbial boat? Are they really saying that they don’t need it to understand and predict customer behavior, they have a handle on potential fraud, that they make routine decisions, financial decisions, and purchasing decisions very well, thank you?
Finally, is it that they know exactly how their supply chains are performing?
Big data analytics is becoming a reality and its effective use is setting companies apart from their counterparts.
Use the Right Number of Vendors
Supply chains today are all about mitigating risk and the number of vendors is one of those risks.
Too many vendors can mean the following challenges:
- The inability to capitalize on order volume
- Less chance of a good relationship with vendors based on solid communication—this was an important factor during the COVID-19 pandemic—governing who receives the products available
- The act of sharing information is more cumbersome
- Managing more and, typically, achieving less
How many is too many when it comes to vendors, though?
Make sure the number of suppliers meets your individual needs. Consider minor disruptions in supply when determining this number. At least one of your suppliers should provide:
- Valuable information about the latest manufacturing advances and technological innovations
- Having access to recent innovations of chip-design houses is critical
- Suppliers that serve a number of markets spot shifts and economic trends early on—and can warn customers about them
There is no specific number of suppliers set in stone—it’s based on your company’s needs. What is important is that you review those needs and make adjustments when necessary. Even if you are dealing with fewer suppliers, dealing is still necessary, which brings us to the next point: managing the relationships you do have.
Personal Relationships Have Not Gone by the Wayside
What is logically clear to avoid messing up your supply chains seems to be the most muddled in reality. Today, our ability to form strong friendships and relationships within our families wanes under the stresses of “always-on” work. However, forming strong personal relationships with suppliers is critical.
Fortunately, there is Strategic Relationship Management (SRM) that uses processes, principles, communications, and tools to help manage their suppliers.
SRM yields increased efficiency, improved communications, cost savings by managing quality and delays, and ongoing improvements in process and results.
Manage, Manage, Manage—Where the buck stops
Supply chain horror and mismanagement stories are plentiful. Be careful to avoid being one of them.
The buck can be easily passed, but as a manager, it’s likely to stop with you. Proactive management is mandatory.
Make sure you explore and access tools that could benefit your company. Not only will you level the playing field with your competitors, but it might get you a step ahead.