Written by Ryder Supply Chain Solutions
Sophisticated supply chain innovations are transforming the way goods are moved from point A to point B. But, at the heart of a high-performing supply chain are five core components, which can make a big difference in top- and bottom-line results.
Wrestling with the challenges of change is nothing new. Author Alvin Toffler once said “Change is the process by which the future invades our lives.” Surely, when it comes to logistics, this statement resonates with all of us. Especially when you consider the flattening effects of an increasingly global economy. The emergence of new markets, channels, and suppliers – and the economic headwinds we’ve been navigating for the last three years.
For many companies, thriving or even surviving has meant adapting to a significant “change invasion” in the way goods are sourced, stored and delivered. As the economy rebounds, our clients in the automotive, aerospace, hi-tech, retail and consumer goods industries are focusing on new ways to cut costs and boost profits.
One of the most promising areas is the supply chain. As companies seek to eliminate inefficiencies, flexibility, innovation and the ability to operate with virtually no margin of error are requirements. How well a company can anticipate and react to change, its agility and level of innovation depend on the ability to execute at a very high level. Effective supply chains and the companies that run them share five key characteristics.
- Know-how – synchronizing the supply of parts, products and assemblies with manufacturing requirements and customer demands requires in-depth knowledge and experience. Transformation depends on the ability to assess the current state of a complex supply chain from the warehouse to the entire operation and know how to optimize it. Knowledge provides the foundation for proactive development, engineering and deployment of logistics solutions that leverage proven practices to drive improvement across the network and execute with precision and reliability.
- Proven practices/track record - the firms that successfully transform their supply chains are the ones that have a template or model of proven practices. This model becomes a pattern for a standard, repeatable solution set that can be applied across different industries and areas of the supply chain. This is not to say that all supply chains should be approached with a ‘cookie cutter’ model. Rather, a standard solution set based on proven best practices can be customized to meet individual requirements. In the absence of a proven model, it can be difficult to know what will lead to success.
- Lean methodologies - applying lean processes is the key to delivering long-term value and consistent performance. In a lean culture, logistics teams are empowered to identify and eliminate waste in every process associated with fulfilling orders. Lean tools like visual cues, problem-solving jackets, and root cause analysis result in shortened lead times, built-in quality and continuous improvement, all of which accelerate time to market. To combat waste, the concept of kaizen, or continuous improvement, focuses on making daily incremental improvements that add up to significant gains.
- Deep expertise - today’s complex supply chains require applied knowledge, not only in their inner workings, but also with big-picture insight into the impact that changes in one area of the supply chain will have across the network. Excellence in supply chain execution demands functional expertise in distribution management, transportation management, cross-docking and network design; it also requires industry expertise in the unique aspects of customer requirements, drivers of profitability, challenges and trends for a particular industry segment. Functional and industry-specific knowledge allow companies to better synchronize supply and demand to optimize the flow of goods across the network.
- Resources & capabilities - an optimized supply chain draws on extensive resources, capabilities and services. Whether you’re managing your own supply chain or relying on a 3PL provider, a high-functioning network includes warehouses, vehicles, an on-the-ground global presence, people trained in quality and continuous improvement, state-of-the-art technologies that provide real-time visibility into supply chain activities and customized transportation and warehouse management systems.
Together, the combination of know-how, proven practices, lean methodologies, deep expertise and resources are the secret sauce to supply chain efficiency and to get products to market faster, drive efficiencies, cut costs, enter new markets and boost satisfaction.
What best practices enable you to execute supply chain efficiency with excellence? Where could you improve?
Look for our next post, which will address the importance of know-how in driving change.
