- Bottlenecks – to ensure that the supplies are uninterrupted.
- Critical – to manage the relationships with suppliers and thus seeking their co-operation.
- Routine – to find most efficient ways to source the material
- Leverage – to find the best available deal
Supply chain is the overall view of business process. The every step of it adds significant value to the product or service. By managing the process efficiently one can control the cost and hence enhance profit margins.
So before starting your business draw the supply chain and give a serious thought on each component of it to control costs.
Supply-chain professionals contribute to a company’s bottom line by effectively and efficiently managing a complex network of people, resources, activities, and technology structures. An exceptional supply chain creates efficiencies and can create a sustainable competitive advantage. These efficiencies can increase revenue while decreasing costs. A well-managed supply chain provides companies with the ability to execute best practices in the following areas:
- Demand Planning
- Procurement
- Logistics
- Inventory Management
- Information Systems
- Compliance
- Distribution
- Risk Management and Contingency Plans
“Organizations must carefully manage their operations and supply chains in order to prosper and, indeed, survive.” (Bozarth & Handfieldpage, 2016, p. 3) As such, companies rely on supply-chain experts to lead the development and implementation of agile strategy solutions to support organizational growth.
Effective supply-chain managers are able to:
- Strategically procure products, services, and e-commerce solutions
- Deftly negotiate contracts with suppliers and distributors
- Implement effective strategies for streamlining supply-chain management operations
- Maximize customer value through eliminating various types of waste
- Manage a global supply chain
Companies of all types, in all industries, place a high value on supply-chain professionals who leverage their technical expertise, soft-skills, and keen understanding of customer needs to benefit the bottom line.
A New Breed of Professional
The delivery of goods and services is becoming increasingly complex in our global economy. Natural disasters, unstable world economies, and unpredictable political landscapes require a new breed of professional who can manage the complexities of the global supply chain. The problem is that by 2018 there will be 200,000 supply chain jobs available. Most individuals will not meet the minimum qualifications for these roles. This is an opportune time to develop that expertise by enrolling in Kettering University’s online Supply Chain Management and Enterprise Resource Planning Certificate.
Learning the art and science of effective supply-chain management will place you in a unique position to improve your company’s bottom line and ensure career advancement. Imagine if you could bring the following types of expertise to your company:
- Effectively utilizing production technologies
- Creating collaborative relationships with suppliers, distributors, and customers
- Providing real-time logistical information which leads to improved decision-making
- Improving forecasting and planning cycles
- Refining warehousing, transportation, and other logistics
- Understanding the unique issues of dealing with a global supply base
With a graduate certificate in Supply Chain Management and Enterprise Resource Planning from Kettering University, you can actively manage value-added processes across organizational boundaries to meet organizational goals and consumers’ needs. You also can lead your company in creating efficiencies to enhance collaboration and decision-making, implementing the technology structures necessary for information sharing, and managing the complex issues of global sourcing, logistics, and sustainability.
Becoming an expert in the concepts, trends, and technologies that enable successful global supply-chain management is the first step towards a profitable and rewarding career in supply-chain management.
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When you think about Supply Chain optimisation you typically think of improving delivery times, delivery accuracy and customer service. However, what many organisations fail to consider is that smarter supply chain management can also generate many hidden savings. Indeed, many organisations fail to make the link between the logistical process and the financial information, and miss out on a lot of revenue as a result.
Here are my four suggestions for how you can allow your organisation to improve profitability by making quick and simple savings:
1. Inventory Management
Let’s say you have just two hours’ worth of stock sitting in a car factory, with the aim of keeping the costs of storage low. But what if a certain part, such as a bumper, is delivered half an hour too late? It could result in a standstill of the entire, tightly coupled production line. So what are the costs associated with this? Purely focusing on limiting stock is far too short sighted and, in terms of the bottom line, the result will often be that it costs more than what it yields. Organisations must find the right balance between minimising their stocks and being able to meet order demands. The threat of a stock shortage must be visible before it actually arises and you have to be ready to give your customer ‘no’ for an answer if necessary.
2. Supplier Cash Control
A great deal of insight can be found in the supply and payment agreements with suppliers. There are a number of elements to consider, including how you can avoid purchasing unnecessary stock (through automated order placement), avoidance of costs for corrections in orders and supplies and the optimisation of the payment behaviour of suppliers. Ongoing partnerships with vendors often contain a lot of automatic processes that have to be analysed and optimised critically.
3. Operating Expenses Control
For many organisations, a great deal can also be improved on the operations side of things. There can be reasons for incorrect supplies occurring, and instead of simply correcting the relevant order, it’s important to search for the point in the process where the error arose in order to prevent the same mistake from happening again.
4. Customer Cash Control
When improving the profitability of customer relationships and orders, the measurability of order processing and optimising settlement of payments is crucial. By continually measuring whether the right product in the right quantity is delivered to the right place at the time required by the client, supply processes can be further optimised and costly errors avoided. However, a factor that is at least as important in order to save costs is the settlement of payments with clients. Reducing the term between ordering and payment, solving late payments, making missing payments visible and invoicing for them can save a great deal.
In order to realise real improvements in the supply chain, it is vital that logistical experts and controllers work far more closely together. In many organisations, supply chain optimisation is considered too much from a logistical point of view, without looking at what the exact economic “what happens to the cash?” consequences of certain decisions are.
With a relatively simple analysis, it’s clear that companies can gain quick wins. Unfortunately, a lot of companies are still missing out on opportunities because they do not have complete visibility or do not think things through. In order to realise actual savings, organisations will have to calculate the effect of implementing changes in supply chain operations on the working capital, the operational costs, service provision and the revenue of the organisation. Only then will it be possible to determine the extent to which supply chain optimisation truly can increase profitability.