Improving Supply Chain Performance

asprovaGetting a 360-degree view of their supply chain is critical for manufacturers and distributors in today’s business world. Those that have unparalleled insight, visibility to their supply chain and understand how their company actually functions (versus how they expect it to) can find ways to optimize vendor relationships, focus on tactics that will increase supply chain efficiency and be able to monitor the myriad of factors that impact supply chain performance. By managing and improving environmental, social and economic performance throughout supply chains, the very best companies can conserve resources, optimize processes, uncover product innovations and save costs. Any manufacturing company that wants to enhance their performance must pay attention to the following key strategies:

Improve Demand Forecasting- Constructing a feasible, constrained and profitable demand plan is essential. Without accurate demand forecasting, manufacturers can only be confident in their ability to meet demand if they rely on inefficient stockpiling of inventory: The emphasis is on “just in case” processes, rather than “just in time.” Many companies now recognize that the only way to attack demand volatility is to expect it, and they are adopting the best practice and advanced technical tools to deliver improvements to forecast accuracy, inventory levels and working capital. For the rest, it is becoming increasingly clear that inadequate demand planning can do serious damage to shareholder value and overall profitability.

Create a Modern, End-to-End Supply-Chain OrganizationThe times of managing the supply chain in separate tiers is over. Sophisticated data analysis enables companies to manage supply chains end to end and, in industries such as manufacturing, almost in real time. Appoint a single leader with responsibility for end-to-end performance and for delivering improvement projects across tiers and traditional functions such as marketing, manufacturing, and procurement. Make sure your supply-chain organization combines operational excellence with strong analytical capabilities and data-driven, cross-functional decision making. Ensure your IT function is supporting them with nimble applications and platforms that enable collaboration and analytical decision making.

Join Industry Collaboration- Many companies recognize that complex supply chain challenges cannot be solved by individual efforts and that industry wide collaboration is required. Working in a pre-competitive environment, peer companies that share similar supply chains can set common standards and best practices for sustainability performance and allow suppliers to be evaluated on the same metrics. These collaborations help prevent audit fatigue, training redundancy and mountains of paperwork for suppliers working to meet similar requirements from their customers. Working with your industry peers is a great way to share knowledge about the sustainability performance of your suppliers.

Develop Training and Capacity Building ProgramsThis is an important step in improving sustainability and driving behavioral changes throughout your supply chain. First, formulate a comprehensive plan to increase productivity, reduce costs, and improve customer service and satisfaction levels. Then tie an incentive plan into the supply chain’s core mission, a critical element to building a performance-based approach. Incorporate your workforce into the culture of the supply chain by emphasizing ways in which employees and management may improve their workplace strategies and execution. This constructive training will drive a successful organization and improve supply chain productivity.

Asprova is the manufacturing industry’s leading performance improvement solution suite. Our advanced planning and scheduling functions help organizations achieve sustainable cost reductions and improve supply chain performance while remaining focused on quality, productivity and better service levels.

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Phot credits: flickr © The U.S. National Archives

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