3 Best Practices of Successful Supply Chain Management

3 Best Practices of Successful Supply Chain Management

AE Logo

Recession or not, we have resources to help your business master this moment of high interest rates, labor shortages, sticky inflation, and slower growth. We've put together our Agility & Excellence Resource Center to bring you strategies and solutions with a finger on the pulse of what's ahead.

Supply chains continue to face increasing disruptions in today's global manufacturing landscape, requiring a shift in the traditional approach to supply chain management (SCM). This necessitates stricter management processes, adaptability and agility.

To achieve stability, supply chains must be robust and responsive, able to adjust quickly and meet consumer needs and demands in times of uncertainty. Embracing best practices is essential for addressing these challenges effectively, boosting efficiency, cutting costs and ensuring the smooth operation of all supply chain activities.

Below, we will explore three key supply chain management best practices that contribute to a stronger supply chain network.

Take a Proactive Approach

An organization can leverage various resources and strategic approaches to streamline its supply chain process, enhancing visibility and enabling more informed decision making.

Here are a few examples:

Supply Chain Planning (SCP)

The smooth flow of goods, services and information from suppliers to customers depends on the strategic organization of resources through supply chain planning (SCP). Businesses use SCP software to plan effectively, run various "what if" scenarios and meet real-time customer demands, all while navigating existing constraints.

Despite its critical role, supply chain planning is often a point of vulnerability in supply chain management. It encompasses intentional and structured efforts to address aspects like demand planning, market research and the impact of geopolitical forces and regulations. The insights derived from SCP are beneficial, as they are shared across different areas of the supply chain and with senior management to ensure appropriate next steps.

Risk Management

Companies must implement regular and formal risk assessment and mitigation strategies to manage disruptions, including natural disasters, geopolitical issues, cyber risks and vendor risks. Fraud and vendor risks are increasing in uncertain times, so enterprise risks need close examination and stricter vetting of vendors and suppliers is required.

Supplier Lifecycle Management

Supplier lifecycle management (SLM) is a disciplined approach to building and maintaining strong relationships with suppliers and service providers. SLM can help businesses improve supply chain reliability, reduce risk and achieve their overall business goals.

SLM involves managing the entire supplier relationship, from onboarding to ongoing monitoring and evaluation. This includes segmenting suppliers based on their potential impact on the business, identifying and mitigating risks and building trust and collaboration.

Businesses that embrace SLM can benefit from several advantages, including:

  • Faster onboarding and improved supplier performance
  • Up-to-date supplier data and compliant spending
  • Reduced risk and disruptions
  • Stronger supplier relationships and collaboration
  • Simplified supplier management and improved efficiency

By investing in SLM, businesses can position themselves for success in the increasingly competitive global marketplace.

Understand Today’s Needs

Leveraging current resources to tackle existing supply chain challenges and understanding how to reduce associated risks can help prevent potential issues from escalating.

Inventory Management

Effective inventory management includes proper warehouse organization and location, as well as implementing appropriate inventory level tracking and oversight.   This includes, among other controls, a structured cycle count program to ensure accurate inventory levels, setting effective reorder points for critical materials and identifying appropriate safety stock levels.

Technology and Data Analytics

Supply chain management software and data analytics are key tools for manufacturing companies to improve visibility and decision making. Here’s how they contribute to creating a more streamlined and effective supply chain:

  • Real-time tracking of materials and products helps identify and address bottlenecks or delays promptly, fostering more efficient operations.
  • Data analytics turns raw data into actionable insights for precise forecasting and demand planning, maintaining optimal inventory levels and preventing overstock or stockouts.
  • Enhanced vendor management enables better negotiation and supplier performance tracking.
  • Overall improved visibility and data-driven insights contribute to significant cost reductions, proactive risk mitigation strategies and enhanced collaboration across the supply chain stakeholders.

Ultimately, these capabilities lead to increased customer satisfaction through timely product deliveries and more responsive service.

Strive to Improve

By continuously improving their supply chain, companies can not only boost efficiency and customer satisfaction but also enhance their reputation and credibility.

  • Lean Principles: Leading companies actively apply lean practices to eliminate waste and improve overall process efficiency. These practices include value stream mapping, standardized work processes, visual management tools and total quality management principles.
  • Sustainability Initiatives: Environmental, Social and Governance (ESG) is a top priority for investors and consumers, and businesses must now incorporate sustainable practices into their supply chains to reduce environmental impact and meet regulatory demands.
  • Quality Control: Although quality control may seem obvious, maintaining high-quality standards throughout the supply chain can reduce defects and customer complaints.
  • Continuous Improvement: Given that markets and other forces continuously change, companies should continuously assess and improve their supply chain processes through regular analysis and benchmarking.
  • Collaboration: To optimize supply chain performance, management must foster collaboration among suppliers, manufacturers, distributors and retailers to improve communication and coordination.

To achieve stability and resilience in today's dynamic business landscape, organizations should embrace SCM best practices that promote collaboration, agility and continuous improvement. This can lead to a more efficient and responsive supply chain, ultimately improving customer satisfaction and competitive advantage.

Connect With Us

Our supply chain professionals stand ready to assist you with any help you may need. Connect with us today.

Copyright © 2024, CBIZ, Inc. All rights reserved. Contents of this publication may not be reproduced without the express written consent of CBIZ. This publication is distributed with the understanding that CBIZ is not rendering legal, accounting or other professional advice. The reader is advised to contact a tax professional prior to taking any action based upon this information. CBIZ assumes no liability whatsoever in connection with the use of this information and assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

CBIZ MHM is the brand name for CBIZ MHM, LLC, a national professional services company providing tax, financial advisory and consulting services to individuals, tax-exempt organizations and a wide range of publicly traded and privately held companies. CBIZ MHM, LLC is a fully owned subsidiary of CBIZ, Inc. (NYSE: CBZ).

3 Best Practices of Successful Supply Chain Managementhttps://www.cbiz.com/Portals/0/Images/Thumb-3BestPracticesOfSuccessful-1.jpg?ver=Q7fAQs128b3Ry5rBG5qDqA%3d%3dhttps://www.cbiz.com/Portals/0/Images/Thumb-3BestPracticesOfSuccessful.jpg?ver=ZUWTG5yTxNcTwe-EOk_rYA%3d%3dIn this article, we will explore three key SCM best practices that contribute to a stronger supply chain network.2023-10-31T17:00:00-05:00

In this article, we will explore three key SCM best practices that contribute to a stronger supply chain network.

Risk MitigationManufacturing & DistributionBusiness & Management ConsultingYes