5 Tips for Improving Your Company’s Supply Chain Efficiency
30 Mar 2021
A recent news story may have caught your eye. A megaship was caught by a powerful windstorm while sailing down the Suez Canal. Ever Given tilted and got grounded on the shores of the narrow waterway. The ship blocked one of the most important naval thoroughfares in the entire world. Over 320 ships were stranded on either side of the canal, up until salvage teams freed the container ship seven days later.
Although it may mean little to ordinary people and small businessmen, the blockage of the Suez Canal posed a logistical nightmare for businesses everywhere. The Suez Canal is vital to the global supply chain, presenting a route that’s a full nine days shorter than traversing the Cape of Good Hope at the southernmost tip of Africa.
But the blockage of the Suez Canal has raised some important questions: is having a single route really efficient for essential supply chains?
If you run a business, you should be asking yourself how you can avoid such a scenario by enhancing the efficiency of your own supply chains.
Improving Supply Chain Efficiency
A supply chain refers to the intricate network that connects your business to the other companies that supply the necessary materials for your products. Everything, from natural preservatives for cosmetics to aftermarket parts for Caterpillars are all located on someone’s supply chain, whether as the end product or the supply. Your business’s profitability relies on how swiftly and regularly you receive these essential materials from your suppliers. Therefore, its vital that you improve the performance of your supply chain.
Here are five ways you can improve the efficiency of your business’s supply chain.
1. Prioritize Local Suppliers
One of the most obvious weaknesses of ordering supplies from overseas is that it takes longer and its more expensive to do so. Your materials have to travel for hundreds if not thousands of miles while using up fuel just to get to your company. There’s also the chance that crises like the Suez Canal blockage or a natural disaster can cripple shipping.
If you work with local suppliers, you’re not only supporting businesses, you’re also using less fossil fuel and taking less time to get your goods. Always look for local suppliers first before partnering with foreign supply companies for large savings.
2. Increase Visibility
Supply chain visibility refers to your ability to track the progress of goods along certain segments of the chain. This can mean you get hourly updates on a delivery van or regular notifications on the progress of a cargo ship.
Increasing the visibility of the progress of goods towards your company allows you to anticipate actions. For example, if shipments look like they’re going to come in a little late, you can plan accordingly. Work with your suppliers to make sure you can keep tabs on their progress as often as you can.
3. Evaluate Current Suppliers
Never be complacent when it comes to your suppliers. Just because your current suppliers are doing a well-enough job doesn’t mean you can find another business that can do better.
Check your suppliers every quarter or so to see if they’re still the perfect fit for your business. Use supply chain visibility to compare their delivery efficiency over time. Evaluate the price of their goods versus other local suppliers. Always be on the lookout for suppliers who can provide you with cheaper and more local products as well as better ways to monitor your supplies.
4. Embrace Technology
Technology has progressed so rapidly in the last few years, some parts of your supply chain can be fully automated with little to no hassle. For example, you can create a simple program that emails your suppliers with your regular orders at predetermines times. You can access programs that alert you automatically if your supplies will be late or early. Instant messaging applications let you connect with supply companies directly. You can even create a digital catalogue for your entire inventory, making it easier than ever to manage your supply chain.
5. Always Have a Backup
If the blockage of the Suez Canal has taught businesses everywhere a lesson, it’s that you should always have a backup plan. In the case of the Suez Canal, the backup plan is the Cape of Good Hope to the south. However, you should also have contingencies in place in case your goods can’t make it to your company in time.
Alternative suppliers, backup courier services, stock redundancies and emergency alerts are all useful in case your current supply chain is compromised.
Supply chains connect every business and consumer across the world, providing essential items to everyone on the planet. Like any chain, a single weak link can compromise the entire network. Improving your supply chain will not only strengthen your own business, but the entire global chain as well.