Supply chain · 17 July 2015

The first steps for developing a successful supply chain


Smooth procurement processes are key for supply chain success

For most of history, the supply chain that links the world together today would have been unimaginable. The road to market is now a superhighway with numerous opportunities for organisations, with people, activities, information and resources helping drive their route to success. It is a 24/7 operation that is crucial to business growth. Global trade simply does not sleep. In fact, it doesn’t even pause for a nap. Wheels on the ground, wings in the sky and keels in the water constantly connect a largely borderless world economy, which businesses of all sizes need to capitalise on.

At the same time, as established as the global supply chain may already be, not one person in the logistics industry doubts that “faster, cheaper, safer, simpler” are the key objectives to success throughout the entire shipping network. With intricate parts and endless products, managing an effective supply chain can prove challenging, so I’ve devised a four step approach to achieving a high-performing, sustainable, adaptable supply chain that businesses, large or small, can follow.

(1) Supply chain: the specifics

Every supply chain is different, so what is beneficial for one business may not be for another. It’s important to remember this as a micro business and to recognise this as you grow. Getting to grips with the specific requirements of your products is important for tailoring your network appropriately. Introducing segmentation allows you to map to your customers’ requirements as needed and will help you forecast accurately.

(2) Procurement process: a joined-up approach

The procurement process can cause challenges in the supply chain, which means businesses can end up with stock in the wrong place, at the wrong time, or simply the wrong stock. Inaccuracies in quantity figures can produce supply chain bottlenecks, which in turn create inefficiencies and impede agility for businesses regardless of size. Therefore, it’s important that procurement and forecasting work together.

Larger firms may have internal procurement and inventory management teams, whose responsibility it is to maintain a joined-up procurement process. For micro companies, it could be one person doing both roles, so it is critical these layers in the supply chain act seamlessly and continue to be managed effectively. After all, your logistics provider can’t ship the necessary stock if the correct volume of products isn’t available – and if this is the case, your customers won’t receive the products on time – which can be hugely damaging.

(3) Data: an ample dose

As the amount of data available to businesses grows, the importance of using this wisely to aid your supply chain also increases. The enhanced visibility big data enables, is crucial in understanding customer delivery and demand. It also enables automation and ensures that each layer of the supply chain is consuming real-time data. This means customer demand is accurate and unnecessary stock replenishment is prevented. Put simply, data helps your business to be more sustainable and as a result, healthier.

(4) Logistics providers: make them work for you

By working with the correct logistics provider and asking the correct questions, business of all sizes can receive a service that 100 per cent supports their business’ individual objectives. But you need to ensure you are using their expertise and knowledge correctly as they have the ability and network to make your supply chain even more seamless and could save you both time and money. Whether it’s the physical movement of goods, monitoring inventories in different places or securing access to new locations, there is a whole host of information in play throughout the supply chain. It’s up to your provider to put this information at your fingertips. All of this ultimately equips you to better manage your inventories as well as your business.

Today’s supply chain has come a long way, but the supply chain of the future will be even more finely tuned, accessible, reliable, sustainable – and profitable – than ever before. That’s good news for micro businesses, SMEs and enterprises alike, because regardless of operational size we’re all so dependent on it. It is therefore imperative to take note and ensure your supply chain is in order so business growth can be accomplished.

Image: Shutterstock

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ABOUT THE EXPERT

David Poole is managing director of sales, UK South at FedEx Express and FedEx UK. FedEx Express is the world’s largest express transportation company, providing fast and reliable delivery to every US address, as well as more than 220 countries and territories. 

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