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Six Ways To Optimize Your Supply Chain To Generate Profit

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Companies use multiple tactics to generate economic profit, including introducing new products, launching marketing campaigns or undertaking acquisitions. Supply chains offer an effective, though less understood, path to creating value through growth, driving down working capital, improving cash flow and lowering cost.

Surprisingly few companies understand the importance of the supply chain, and few have a formal strategy in place for managing global supply chain risk in the years ahead. This is especially dangerous given the volatility and uncertainty in trade relations between the U.S. and China, as well as other scenarios around the world. Besides geopolitical uncertainty, having the right talent, a holistic perspective and appropriate technology may all figure into the supply chain risk factor.

Use the following best practices to optimize your supply chain and minimize risk.

Redefine The Supply Chain

Best practices begin with redefining supply chain excellence and broadening its scope.

Create A Cross-Functional Team

Best practices for driving shareholder value through supply chain optimization can be easily implemented in any company for concrete results.

Focus On The Right Metrics

Following increased visibility and cross-functional team-making, focusing on the right metrics is the logical next step.

Connect With The C-Suite

Another essential best practice in supply chain optimization is building relationships throughout the entire company and starting conversations with the CFO and other key executives.

Manage Risks

Long-standing supply relationships have value, but disruption of those relationships can be devastating.

Total Value Optimization

The Total Value Optimization (TVO) framework promotes greater collaboration, integration and transparency.

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Separating Long-Term Supply Chain Technology Developments from Temporary Industry Disruptors

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While technological innovations can revolutionize how supply chain businesses advance, it’s important for all participants to be a little bit skeptical when supposedly new game-changing technologies are introduced.

Third-Party Providers Navigate Supply Chain Technology Trends

Technology partners with a long-game approach to development and implementation understand that trends come and go, and it can make little sense to heavily invest in trumpeted technological advancements just because they’re “the new thing.”

While technological advancement brings with it solutions that can revolutionize how businesses in the supply chain interact, it’s important for all stakeholders to be a little bit skeptical when any company introduces a supposedly game-changing new technology.

First Adopters of New Technology

3PLs are typically the first adopters of new technology, as a huge part of their value proposition to their clients is their ability to utilize advanced technology to solve their supply chain challenges.

These logistics providers constantly keep their ears to the ground attending conferences and researching the latest technologies seeking new capabilities. 3PLs can make a single investment in technology and leverage that capability across many shippers.

Technology Partners

Technology partners aren’t simply there to help companies adapt to new technologies. Technological advancements in the supply chain have brought increasing amounts of logistics data to industry stakeholders.

This has, in turn, led to a jump in advanced analytics to turn that data into actionable information, a skill in which technology providers excel. Shippers are using analytics in conjunction with real-time visibility data to identify bottlenecks within their own processes and providers’ networks. This visibility allows them to estimate when shipments will arrive at the intended destination with greater certainty. The future is very bright in this area due to improving visibility technology, more advanced analytics, and integrated collaboration tools.

Technology Advancements

Rapid advancements in technology are changing the industry for the better, and at SMC³, our goal is to incorporate these new technologies into the supply chain processes of our clients. SMC³ truly is a neutral third party; we work for the good of the entire supply chain, helping supply chain companies separate lasting supply chain advancements from temporary industry disruptors.

SMC³ accomplishes this flexibility and adaptability by building our solutions for fast, painless integrations to TMS systems and other applications. SMC³’s goal is always to help our clients get up and running as quickly as possible, so they can start consuming data via our solutions and begin to optimize the lifecycle of their LTL shipments.

Read more at Separating Long-Term Supply Chain Technology Developments from Temporary Industry Disruptors

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Building a Digital Supply Chain Ready for the Future

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With the options that digital technologies provide to develop new business models and new strategies, companies that integrate digital technologies into their supply chain can quickly improve service levels while cutting costs up to 30%.

Complaints from frustrated customers were mounting at a major US retailer.
More than 20% said they could not find the company’s branded products in shops because items were out of stock.

The problem was that efforts to improve service disrupted the company’s low-cost distribution model.

It had the right infrastructure but lacked the digital tools necessary to increase supply chain reliability.

Moving quickly, the leadership team invested in digital tools to obtain real-time data, shorten replenishment cycle times, optimize deliveries and predict future demand.

As data streamed in from stores the minute shoppers purchased goods, the company rapidly restocked hot-selling items to capture sales that it previously had lost.

The shift cut retail cycle times by 20%, to four days, generating a 0.5% increase in sales (see Figure 1 below).

And that was just the first wave of improvement.

Over the next 24 months, the company aims to reduce the time needed to fill store orders to two days, for a 60% total reduction in retail cycle time.

Companies that integrate digital technologies into their supply chain can quickly improve service levels while cutting costs up to 30%.

Just as important are the options that digital technologies provide to develop new business models and new strategies.

For instance, leading-edge companies such as Adidas are deploying 3D printing to move some production closer to customers, offering greater product customization and shorter lead times.

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Lasting Effects of Supply Chain Mismanagement

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In New York City, March 25, 1911, 123 women and 23 men died from fire, smoke inhalation, or falling or jumping to their deaths when a fire broke out in the building where their factory resided on the eighth, ninth, and tenth floors.

The incident was known as the Triangle Shirtwaist Factory fire and is the deadliest industrial disaster in the history of the New York City.

This tragedy and loss of life eventually led to legislation requiring improved factory safety standards.

While this famous incident is over 100-years-old, workplace deaths and injuries are still happening today.

In a recent case, Cusseta, Ala., Regina Elsea was working at an auto parts manufacturer on the assembly line when a mishap occurred, and Elsea was impaled by one of the robots. She died the following day.

The Occupational Safety and Health Administration reviewed Elsea’s case and found the contracting company she worked for was in violation of a federal law that could have prevented her death.

Sadly, in both cases these accidents could have been prevented with better evaluation of contractors and adherence to higher standards of safety in the workplace.

Read more at Lasting Effects of Supply Chain Mismanagement

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