- Efficient supply chain drives cost savings and customer satisfaction.
- Adopt a route planner to optimize your routes and boost supply chain efficiency.
- Enable real-time tracking to keep track of your drivers’ whereabouts.
The key to success in the ever-evolving world of business is supply chain management. Supply chains that are well-managed not only increase a company’s competitiveness but also set the stage for long-term expansion. According to G2, it is estimated that the market size of the supply chain management market will reach $45.2 billion.
In this blog, we’ll dive deep into the world of supply chain best practices. Whether you’re a seasoned supply chain professional or just dipping your toes into this critical field, these practices are the key to unlocking efficiency, reducing costs, and ultimately delighting your customers. So, fasten your seatbelts as we embark on a journey through the 13 essential supply chain best practices that can shape your organization’s success.
So, let’s get started!
Table of Content
Why Do You Need to Manage Your Supply Chain Operations?
Why is it so crucial to manage your supply chain operations effectively? Let’s explore the compelling reasons behind this imperative.
1. To improve efficiency
In every successful business lies an efficient and well-managed supply chain. It ensures that goods and services flow seamlessly from production to the hands of potential customers. Imagine a world where raw materials arrive just in time for production, excess inventory is a relic of the past, and deliveries are swift and precise. This can be fulfilled if you have effective supply chain management.
2. Control costs
Another factor that leads a business to success is managing costs. By streamlining processes, reducing waste, and optimizing resources, you can substantially cut expenses. When every dollar spent is scrutinized, the bottom line strengthens. It’s a simple equation: Well-managed supply chains equal higher profits.
3. Enhance customer satisfaction
For an honest and retained clientele, it is necessary to deliver the utmost customer satisfaction. Delayed deliveries, inconsistent quality, or product unavailability are prime reasons customers seek alternate options. A well-managed supply chain helps customers get their products delivered on time. It builds trust, fosters loyalty, and gets customers’ long-term commitment.
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13 Supply Chain Best Practices
Let’s delve into the topic and discover the 13 supply chain practices that you should adopt in your business:
1. Plan and optimize supply chain routes
One of the most important factors involved in global supply chains is planning routes in a way that minimizes delivery time and saves delivery costs. This factor affects your business’s revenue. The strategic plotting of stops in a route that improves productivity and minimizes fuel costs is known as route planning.
By meticulously planning and optimizing delivery routes, you can reduce fuel consumption, lower transportation expenses, and ensure timely deliveries. Routes can be planned manually using pen and paper or using Google Maps. But both are traditional methods and have several drawbacks. You can adopt an automated way of planning supply chain routes by adopting route planning and optimization software.
This practice not only improves business efficiency and satisfies customers’ expectations but also enhances environmental sustainability—a win-win for both your bottom line and the planet.
2. Diversify relationships with suppliers
Maintaining supplier diversity is the secret ingredient that safeguards your supply chain processes. By building relationships with a diverse network of suppliers, you reduce the risk of disruptions due to unforeseen circumstances such as natural disasters or geopolitical tensions. Diverse suppliers also bring fresh perspectives and innovation to your business. Embracing diversity isn’t just about resilience; it’s about creating an efficient supply chain ecosystem.
3. Establish and analyze KPIs
Key Performance Indicators (KPIs) are the compass guiding your supply chain’s journey. By establishing and rigorously analyzing KPIs, you gain insights into the health and efficiency of your operations. These metrics allow you to measure performance against goals, identify areas for improvement, and make data-driven decisions. Whether it’s tracking inventory turnover, on-time delivery rates, or cost-to-serve, KPIs empower you to fine-tune your supply chain for optimal results.
4. Demand forecasting
Demand forecasting is the process of predicting future demands using historical data. With demand forecasting, you can manage your inventory levels, avoiding overstock and stockouts. With the aid of advanced analytics and historical data, demand forecasting minimizes guesswork and maximizes responsiveness to market fluctuations. As a result, your customers receive what they want when they want it.
5. Implement a centralized document management system
Why store piles of documents in the digital era when you can store and access documents and information online? Implementing a centralized document management system streamlines your documentation processes and reduces the risk of missing documents. It ensures that vital information, from purchase orders to invoices, is easily accessible and securely stored. A centralized system simplifies operations, making your supply chain more efficient and resilient.
6. Recruit and train a diverse team of professionals
Teams of employees are the connecting pin in a supply chain. Recruiting and training a group of professionals brings skills to the table, and eventually they help your business grow. In a rapidly changing landscape, a multidisciplinary team can adapt to new challenges and technologies more effectively. While hiring, make sure your ideal candidates are equipped to tackle the evolving demands of the industry.
7. Purchase supplies in bulk
By buying supplies in larger quantities, you often secure better prices and terms from suppliers. This practice not only reduces per-unit costs but also mitigates the risk of supply shortages. However, it requires careful planning and inventory management to avoid excess stock. Bulk purchasing strikes a balance between cost efficiency and inventory control, making it a valuable tool in your supply chain management strategies.
8. Implement effective inventory management
Effective inventory management holds the keys to your supply chain’s efficiency. It involves fine-tuning stock levels, optimizing storage, and minimizing carrying costs. By striking the right balance between supply and demand, you can reduce excess inventory, avoid stockouts, and free up working capital. This practice hinges on data-driven decisions and demand forecasting to keep your inventory lean and responsive.
9. Technology and automation
In the era where every industry is adopting technology, you should also automate your supply chain processes using technology. Whether it’s using robotics for warehouse automation, harnessing Artificial Intelligence (AI) for demand forecasting, or leveraging the Internet of Things (IoT) to track goods in real time, these innovations enhance accuracy, speed, and efficiency. Using technological advancements, you can reduce human error, lower labor costs, and leverage maximum productivity.
10. Establish internal communication
By establishing internal communication in your company, you can avoid any confusion and miscommunication happening inside. It ensures that departments across your organization are aligned, informed, and working towards common goals. Establishing clear communication channels fosters collaboration, problem-solving, and agility. With open lines of communication, teams can respond swiftly to changes in demand, disruptions in supply, or emerging opportunities.
11. Implement effective payment methods
Efficient payment methods are the backbone of an order-to-pay process of a supply chain. By implementing streamlined payment processes, you not only ensure that suppliers are compensated promptly but also reduce the risk of financial disruptions. Digital payment systems and electronic invoicing not only expedite transactions but also provide transparency and accuracy. This practice fosters trust and strong relationships with suppliers, ultimately enhancing the stability of your supply chain.
12. Establish cross-functional collaboration
Cross-functional collaboration involves efficient collaboration and communication between multiple departments, from order receiving to logistics to sales. Collaboration enables better decision-making and problem-solving. When teams work together seamlessly, they can respond more effectively to changes, whether in customer demand or supply disruptions. By establishing cross-functional collaboration, you ensure that the entire organization is aligned toward the common goal of supply chain success.
13. Carry out continuous improvement
Continuous improvement works as a stepping stone towards the excellence of your supply chain. It involves regular assessment of processes, identifying areas of improvement, and implementing changes. Implementing Kaizen principles and Six Sigma methodologies establishes a culture of continuous improvement. It’s not about settling for the status quo; it’s about constantly striving for greater efficiency, reduced costs, and improved customer satisfaction. In a rapidly evolving business environment, embracing continuous improvement is the key to staying ahead of the curve.
Automate Routing Operations of Your Supply Chain Business with Upper
A supply chain operation is inefficient if the driver follows unplanned or manually planned routes. They are expected to reach their destination on time and deliver unharmed goods. This is where Upper comes to their rescue. Upper is a route planning and optimization software that offers a bouquet of useful features.
Some of the most game-changing features of Upper are:
Route planning and optimization
Upper excels at creating the most efficient routes for supply chain businesses like yours. Upper plans route considering factors like number of stops, distance, service time, delivery time windows, type of vehicle, and stop priorities to ensure your goods reach their destination on time. By following the routes planned by Upper, you save on fuel costs, reach your destination faster, and improve overall business efficiency.
While using Upper, you no longer need to enter data and stop details manually. All you need to do is import the Excel (XLS) file with stop details into Upper. In a few seconds, all of your data will be imported. Upper streamlines the process, saving you time and minimizing errors.
Quick driver dispatch and tracking
Once you have planned the routes, Upper allows you to assign routes to your drivers with just a few clicks. This eradicates the possibility of drivers getting overworked or underworked, maintaining a balance between all. Once they are on the road, you can track their progress in real-time, ensuring no time wastage and on-time deliveries.
Reporting and analytics
With Upper, you can keep an eye on drivers’ performance and the number of completed/incomplete deliveries. With this data, you can identify the scope of improvements and carry out data-driven decisions.
Proof of delivery
Proof of delivery is an important document that helps you confirm the deliveries completed and their condition while delivering. Upper enables you to collect proof of deliveries by collecting pictures, notes, and e-signs. This enhances accountability and establishes transparency between delivery drivers and admins.
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Frequently Asked Questions
Upper is a dynamic route optimization software, which means you can modify routes in case of any emergency or last-minute changes. You can seamlessly re-modify routes even after they are planned. Also, in case a driver is suddenly not available to make the deliveries, you can reassign the route to any available driver. This helps you keep up the efficiency, and the possibility of missed stops is reduced.
Yes, you can integrate any third-party apps, including ERP, CRM, or order fulfillment systems into Upper with its API integration feature.
Yes, Upper is an ideal solution for supply chain businesses. Its advanced route planning and optimization capabilities, seamless integration options, and robust reporting features make it a versatile tool that can streamline delivery operations, reduce costs, and enhance overall supply chain efficiency, ensuring that your business stays competitive and responsive in a dynamic market.
As we come to an end of discussing best supply chain practices, one thing becomes clear: success in the business of supply chain management depends on the ability to improve, optimize relentlessly, and ultimately excel in serving your customers. We discussed 13 practices that you should follow to grow your business and achieve greater efficiency.
And in the midst of these practices, one solution works as a game-changer: Upper. It plans and optimizes routes for your supply chain business so your drivers are never lost and always delivering on time. As you embark on the journey to implement these practices and embrace the Upper advantage, you’re not merely streamlining your operations; you’re setting a course for supply chain excellence. Start your 7-day free trial today and experience how Upper helps you keep moving your supply chain smoothly.