Supply Chain Strategies For Sustainable Growth
In the last several years, organizations have become increasingly focused on supply chain strategies as part of an overall plan of streamlining business operations. Without a productive, cost-efficient supply chain, hitting profit forecasts is much more difficult. In order to build and manage an effective supply chain, that grows as the company grows, a strategy for success must be developed.
Creating a supply chain strategy is not a simple task. From sourcing, to production, then transportation, and finally distribution, each link in the supply chain needs to be reviewed for improvements and updates to best practices. The following are some practices to keep in mind as you develop a supply chain strategy.
Create a Supply Chain Leadership Team
Most organizations have a number of departments that play a role in supply chain functionality. Without input from these areas, a supply chain strategy will not be effective. Procurement, Logistics, IT, and Accounting departments all have a part in the supply chain.
A strategy that includes the needs and support of each department will have the best “buy-in.” With each department becoming a stakeholder in the strategy, the department’s participation and goals become defined, and KPIs are created.
Create a Strategy In-Sync With the Business Goals
All forward-looking supply chain strategies must be in-sync with the overall business goals. This seems obvious, but isn’t always so. Expansion into new markets, exiting non-profitable markets, product development, and sales forecasts must all be taken into consideration.
The Role of Technology
Technology is a significant factor in supply chain strategies. If the organization is on the fore-front of using technology in the supply chain, with the latest in procurement and payment software, creating a sound supply chain strategy will be much easier. If not, an investment in software, with the related costs of implementation, have to be considered.
What about Supply Chain Finance?
The future is now regarding supply chain finance. Most organizations offer supply chain finance to their key suppliers. But will that be enough? More and more suppliers of all sizes are looking for supply chain finance options. This is especially true of the secondary or smaller suppliers that usually make up the majority of the supply chain. Any supply chain strategy must include plans to offer supply chain financing to all suppliers. The risk in not doing this is loosing the flexibility and the efficiency of the suppliers.
The Strength of Suppliers in the Supply Chain
Suppliers are the foundation of the supply chain. When developing supply chain strategies, take into account supplier turnover and have a plan for effective recruiting and sourcing of new suppliers. This should be done as part of the planning for new products and developing markets. If turnover or poor supplier performance is common, investigate the reasons.
Supply Chain Strategies For Growth
Crafting a supply chain strategy is not a simple process. With input from all stakeholders, and a shared vision of what the supply chain can be, a new strategy will be a guide for success. A new strategy will take time to develop, and have changes along the way. In the end, the results will show the effort was worth it.
APVelocity provides supply chain financing solutions to organizations across North America. Supply chain financing and payment automation from APVelocity enables businesses to meet the current challenges in their supply chain and open new revenue opportunities. For more information, call 800-707-4854.