Effective supply chain management can help businesses cut costs and become more efficient. After all, the key to business success is working smarter, not harder.
Data from CIPS reveals that more than a third of firms don’t know how their suppliers are performing. Lack of time and appropriate software, understaffing and forgetfulness are just some of the reasons given for not evaluating suppliers. Yet failing to undertake effective supply chain management could result in hefty, unnecessary costs and inefficiencies.
One of the biggest misconceptions about proactive supply chain management is that it can put a strain on business relationships. Of course, every business wants to remain on good terms with the other departments and leaders in their supply chain, but failing to put in place a framework for collaboration on issues such as deadlines, delivery dates and contracts can actually cause more issues in the long run. Effective supply chain management involves streamlining and improving your supply chain for the benefit of all parties.
Intelligent supply chain management: how can it benefit you?
Supply chain management has historically been a laborious manual process, handling the rates, performance and interactions between a vast network of suppliers. Organisations across all industries rely on supply chains for functionality and delivery. And, in many cases, the scale of profitability for organisations can be directly related to how the various organisations within the supply chain are contracted and managed.
In fact, research from Deloitte reveals that almost four out of five (79%) of organisations with superior supply chain capabilities achieve revenue growth that is significantly above average, while only 8% of organisations with lower performing supply chains have above average revenue growth.
The best supply chains are those that meet every criteria and don’t require compromise from any of the parties involved. Whether it is production, transportation, invoicing or the return of goods, a smooth working relationship ensures that everyone wins.
“79% of organisations with superior supply chain capabilities achieve revenue growth that is significantly above average"
However, managing all aspects of the supply chain effectively shouldn’t be labour intensive. Using 7bridges’ AI-powered logistics platform, it is possible to remove the common headaches of supply chain management by integrating data and automating processes. From procurement to inventory management, supplier performance monitoring to shipping automation, there’s no need for endless spreadsheets. Instead, you can use the intelligence gained from our intuitive and insightful platform to have meaningful, data-driven conversations with your suppliers to secure the best rates, performance and, ultimately, profits.
What else can you do to ensure effective supply chain management?
The first step to getting the most from your supply chain is to engage the right suppliers for your unique needs. Making your requirements crystal clear from the outset is a must. After all, how can you expect them to meet the high standards you want from them, if those targets aren’t established in a coherent, measurable and transparent way?
However, even if your supply chain is set up with clear expectations from the start, it doesn’t mean you can cut off all communication from that point onwards. Regular updates and conversations mean you won't surprise your suppliers with curveballs they weren’t previously warned about (and vice versa). Every link in your supply chain needs to know what to expect from all other parties at all times, and an open line of communication is the only way to achieve this.
This regular communication helps work towards another key aspect of supply chain management: trust. Keeping suppliers in the loop about updates, changes and projects lets them know that you can be counted on, allowing every organisation and leader to deliver what is necessary. If (and when!) honest mistakes do occur, constructively working together towards a solution is much more effective than placing blame or penalising errors unnecessarily.
At 7bridges, we believe that all organisations deserve access to world-class supply chain solutions. Our innovative logistics platform has helped our customers save as much as 30% on their direct costs, promoting transparency, speed and opportunity. Get in touch with our team today to find out more about how we can support your business.