3 Tips to Optimize Your Supply Chain
It’s the middle of the summer,
and yet your inventory numbers look like you’re gearing up for the holiday
rush. Upper management is demanding answers for this, but you don’t have any.
You have looked over the numbers so many times that you have memorized them.
Yet you still don’t have any answers for them. How is it that you have got the
wrong mix of products in your warehouse? Where’s the breakdown in the supply
chain that caused this?
If you had a more complete understanding of
your supply chain, and how it integrates into your overall business strategy,
you’d have some answers–and your warehouse wouldn't be stocking so much
inventory. Learn more about Oracle
SCM Cloud Services
In today’s global economy, your products are
often just as global. Parts are shipped in from around the world, assembled in
one locale, shipped to another, and sold all over the world. Understanding your
supply chain’s characteristics ensures that you’ll be able to maximize the work
done at each stage, as well as take advantage of any optimization
opportunities.
Most supply chains consist of a series of
Pulls and Pushes moving the products’ downstream to the customer. So
understanding which method is being used at each stage of your supply chain is
very important. Each node should be configured to either push or pull the
product along, based on demand, forecasts, your organization’s strategies and
also available inventory. It gets challenging when you’re trying to plan the
availability of inventory at each stage of the chain, and you’re unsure which
method is being used where.
Use these three tips to optimize your supply
chain planning and give you better control over your inventory.
Tip 1 – Review your fulfillment timeline
The ultimate goal of your supply chain is to
get your product in the hands of your customers within the time frame they
expect to receive it. The word expect is key here. Depending on the complexity
of your product, your customers may expect to receive it in a few days or a few
months. The point is, you must set this expectation up front with them, so they
understand how long it’ll take for them to get the product.
·
If
you’re delivering products in a short time frame, then your supply chain must
have adequate supplies at each stage in order to meet that order time frame.
·
If
you’re delivering them in a longer time frame, your forecast accuracy needs to
be high enough to determine when you’ll need the most inventory, and when you
can survive with lower numbers.
Tip 2 – Determine the lead time in each node of the supply chain
Does your product require many steps and parts
to assemble? Does it need a lot of time to assemble? How about your
manufacturing processes, are they appropriate for each stage of production?
These are just a few of the questions you
should be asking about your processes. Accounting for product lead time at each
stage of production can be critical to your overall supply chain, and impact
your bottom line. Your timelines must be accurate in order for you to generate
the correct timeline for your supply chain.
For example, Node 3 in the chain used to only
take three hours per product order, so you build that three hour time period
into your product order/fulfillment lead time. Over the last six months
however, those three hours have slowly crept up to be 4.5 hours per order, yet
you’re still forecasting and fulfilling as if it were 3 hours. Inventory is
starting to bottleneck at that stage of the chain, and your customers are
starting to complain. Download datasheet: Cloud
Supply Chain Management
Tip 3 – Assess your product’s demand
Whether or not your product’s demand is high
or low, or steady directly impacts how you keep your supply chain moving. If
you understand the market ebbs and flows, you’ll be able to keep each node in
the chain working efficiently, and your orders will be fulfilled easily and
smoothly
Stable demand for your products lets you work
from a forecasting model with a good enough planning tool. Kind of like a set
it-and-forget it type of supply chain management.
In today’s competitive times, we are far from
getting the luxury of a steady and predictable demand model. The degree of
competing products and technologies are leading to unpredictable and short
product life. Couple that with global supply chains characterized by longer
lead times, the dependent demands for upstream nodes in the supply chain get
even more unpredictable.
Variable demand for your product means you’ll
have to keep a close eye on your sales orders, and overall inventory, as you’ll
have to adjust your levels throughout your supply chain depending on the
demand. However if you’ve been monitoring your supply chain situation, you’ll
be able to see these changes well in advance, and can adjust your processes
accordingly.
Get help optimizing your supply chain
Over 88% of companies surveyed by Gartner
about supply chain technology said that they needed better supply chain
solutions to improve their business’ performance, and also their own decision
making. Jade Global can help you understand and optimize your supply chain to
make better business decisions. Jade Global offers a number of advisory
services and industry prebuild solutions for its customers to turn their supply
chains in a true value chain. We’ve developed an accelerated approach to implementing
these solutions, to provide our customers with faster time to value and higher
returns. Contact us today and let us help you turn your supply chain in a
competitive advantage for your business.
Have any query regarding your supply chain or
found this blog helpful? Leave your questions and comments below.
Original Blog Source: https://www.jadeglobal.com/blog/optimize-supply-chain-3-tips
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