Developing Effective Supply Chain Strategies
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By Rebecca Langdon
The first thing to tell you is that developing efficient and robust supply chain strategies is an art, and it takes thought and consideration. You can’t turn to a catalogue and pick out a particular strategy that you think will perfectly suit your particular product or service. Instead you need to take each product or service, or group thereof, and design the most effective supply chain. These are my top tips for approaching supply chain development.
- Review the current supply chain first
Unless you are launching a completely new product or service, you will have a current supply chain that you can analyze. It may be that you think it is inefficient or perhaps it seems to be working smoothly. Your goal is to ensure that the supply chain delights your customers and aligns with their expectations. At this stage you need to do your research and produce a gap analysis.
- Consider improving the supply chain
Once you have determined any gaps, you can begin looking at options for improvement. This might be a different warehouse facility, a new logistics plan, or perhaps you want to go to tender to seek new suppliers.
- High versus low risk
You need to consider the issues your organisation will face if the supply chain breaks down and the product or service is either delayed, or is substandard. There may be some products or services which are lower risk, perhaps because they are easily substitutable. For these products/services you may not be too worried about having a backup plan. For critical products/services you should look for any weak points in the supply chain and ensure you have a secondary option. As an example, your core product is handmade sofas and you currently have one supplier. If that supplier loses resource or has a material constraint, you would be unable to fulfil customer orders. You have a single point of failure for your main revenue stream. A Supply Chain Manager would spot this risk and contract with a backup supplier or perhaps hire in a small internal manufacturing capability.
The purpose of this article has been to highlight that a supply chain can either delight or disappoint the customer. There is an art to developing world class supply chains. For a business to be successful they need to invest in a talented and accredited Supply Chain Manager who can develop effective and robust supply chains. In many cases, organisations are turning to CSCP professionals to assist them in this area.