Every organization needs to be focused on supply chain efficiency, particularly in today’s landscape, where consumers (both B2B and B2C) increasingly demand rapid fulfillment and hassle-free exchanges with the companies they do business with. When efficiency is lacking, companies lose valuable customers to their competitors – often those that have mastered supply chain optimization and can deliver on promises to meet modern demands.
But what changes, processes, steps, and strategies can companies implement to optimize the supply chain? To gain some insight into the most effective supply chain optimization tactics, we reached out to a panel of business owners and supply chain professionals and asked them to answer this question:
“What’s the single best way to optimize the supply chain process?”
Meet Our Panel of Supply Chain and Logistics Pros:
Joel Keylor is the co-founder & CEO of Tresle – a platform that connects established private companies with verified buyers and capital. They deal with a lot of small to medium business (SMB) leaders as they approach brand expansion or supply chain optimization through acquisition.
“Companies can get and keep a leg up on their competition through seeking out acquisitions and diversifying…”
Buying a business from an exiting owner can be a great way to generate more revenue on day one and a way for
current SMB leaders to gain competitive advantages.
- We see all the time SMB leaders looking to expand their reach. Buying a business can unlock new technologies, networks, contracts, value chain incentives, all while generating revenue, since it is already an established business.
- Explore this less traveled path and you might find out that it will give you a lasting competitive advantage, rather than competing in something short term like price.
Lisa Anderson is the President of LMA Consulting Group and a leading expert in supply chain management. Known for her unique ability to bridge the gap between strategy and execution and achieve dramatically improved service levels, accelerated cash flow and increased profits, she is often called, the Manufacturing ConnectorSM.
“Without a doubt, the best way to optimize your supply chain process to maximize your customer service, margins and cash flow is to…”
Implement a sales and operations planning process (SIOP) inclusive of your end-to-end supply chain. By taking time to go through the process, organizations have not only achieved dramatic service level increases but have maximized their manufacturing and warehousing capacity, as well as margins while simultaneously optimizing sourcing/locations and accelerating cash flow. While there are several avenues to achieve these kinds of results, SIOP is the best avenue to ensure success.
Louise Procter is a writer for Preowned Forklifts Australia. Living on the sunny South Coast of NSW, Louise enjoys writing articles that have a strong emphasis on OH&S practices and loves sharing helpful tips on creating safe and effective workplaces.
“We are living in a highly competitive marketplace, and it’s imperative for businesses to come up with new ways to streamline their supply chains and optimize productivity…”
Revolutionizing aspects of your supply chain will not only give you better control over your business but will also help you stay ahead of the competition. My number one for optimizing your supply chain, is simplify!
The more links there are in your supply chain the more convoluted and complex that chain becomes. Start by streamlining and cutting out the unnecessary links in your chain, this will increase productivity, efficiency and reduce expenditures.
Making some small changes to your supply chain, such as dealing directly with manufacturers, integrating emerging technologies into your business plan, and above all focusing on the strengths of your business and outsourcing the rest; such as repetitive projects or one-offs.
Chris Budd is the director and experience quality consultant at Isolocity, a quality management system that helps ease the labor from processes related to management of the supply chain and other QArelated items.
“Simplicity is the most effective way to provide solid and predictable lead times…”
Mark Rapley is the Director of Operations at KWIC Internet.
“The most important aspect of a successful supply chain process is…”
Effective communication between the different sites the product goes through. If the communication between the different sites is strong, then the rest should fall into place. Knowing when a product leaves point A, when it should arrive to point B, and any issues that happened along the way will help point C be prepared for the product. All involved parties need to be informed at all times of the product’s progress along the chain so that they can all anticipate any issues that might arise and properly prepare.
Daniel Feiman, MBA, CMC© is a Consultant, Trainer, Author, and Reviewer. Daniel is the Founder & Managing Director of Build It Backwards, a consulting & training firm based in Redondo Beach, CA. He consults in 3 areas: Strategy: Planning & Implementation; Finance: Modeling & Analysis; Process: Continuous Process Improvement. Build It Backwards Turns Roadblocks int Roadmaps™.
“The best ways to optimize the supply chain process are…”
- Interview your key/critical/strategic suppliers & help them understand your exact needs & why.
- Commit to them your exact annual needs.
- Teach them to do the same to their important suppliers.
- Communication & transparency are the keys.
Ian McClarty holds an MBA from Thunderbird School of Global Management. He has over 20 years executive management experience in the cybersecurity and data center industry. Currently, he is the CEO and President of PhoenixNAP Global IT Services. PhoenixNap employs a staff of over 600, operating in 9 separate locations including two in Phoenix, Los Angeles, Valletta, Malta; Belgrade, Serbia; Novi Sad, Serbia; Amsterdam; Singapore; and Charlotte, NC.
“I have found the best way to optimize our process is through the implementation of regular reviews…”
As a data center and cloud technology company, we work with many clients on yearly reviews to significantly improves the supply chain process.
It’s critical to continually adapt to new and emerging technologies to stay ahead of the competition. While organizations have had the capabilities to manage their supply chains for years, with the development of the Cloud,
companies now have more efficient data access to their supply chains.
Harry Goodnight, Executive Adviser at Sweetbridge, Inc., brings over 30 years of domestic and international experience in sales, marketing and supply chain management for companies ranging from $10 million to over $10 billion. Harry has consistently exceeded personal revenue goals, while building and leading high-performance sales and marketing teams for companies such as SAP, E2open and i2. Harry is a pioneering creator and implementer of value-based sales methodologies, which quantify business value and metrics plans for a customer’s product and service offerings, specify the value delivery plans to achieve these benefits and track a customer’s value performance to the plan.
“The single best way to optimize the supply chain process is via the blockchain…”
Given the blockchain’s capabilities for decentralized autonomous value exchange, there may be no other digital system that represents such fertile ground for value realization by monitoring, managing, archiving, planning, and predicting a supply chain’s state..
In short, a blockchain is a decentralized state machine – a Single Version of the Truth – that allows all supply chain participants to synchronize their activities based on the current state of the Supply Chain, with very low information latency.
Tyler Riddell is the Vice President of Marketing for eSUB Construction Software, a Microsoft partner. They have published thought leadership in IECI, Startups-List, ConstructionExec, and the INTEX Commercial Construction Expo, and more.
“Finding ways to optimize your supply chain can end up save you some money in the end…”
There are few tips for getting the best for your buck.
- One step towards cutting back on wasted spending is to sharing demand information with your suppliers. That demand information should be in the form of forecasts, with a defined timeline that converts those forecasts to order or blanket orders.
- Other great tools at the finger tips of a supply chain and sourcing manager, which can help ensure that their suppliers are providing the highest in quality and lowest in cost is Requests for Proposals, Requests for Quote and Requests for Information.
Dr. Julian Stephens
Dr. Julian Stephens obtained his PhD in Physics from Cambridge University followed by 20 years researching real-time logistics optimization algorithms at the industry-leading software house MJC2.
“The best way to optimize the supply chain process is through…”
Synchromodality, which means dynamically switching transport modes in response to real-time events along the supply chain, using the greener and cheaper options such as barge and rail when possible, but with the option to intelligently switch back to truck to cope with disruptions. This de-risks and de-stresses the supply chain and reduces costs for the transport operator and their customer.
A key requirement is very fast, powerful automated scheduling algorithms which can monitor the supply chain and automatically modify the route for each shipment to choose the best option this technology is being developed
in the SYNCHRO-NET project and trialed by DHL, Kuehne+Nagel and COSCO in their networks. SYNCHRO-NET is expected to massively reduce greenhouse gas emissions in the supply chain, and reduce congestion on roads and around busy ports and terminals.
Paul Trudgian owns and manages Paul Trudgian Ltd, a leading supply chain and logistics consultancy based in the UK. Paul is an experienced supply chain program leader with a 20-year background in supply chain management, including the delivery of more than 60 consulting projects in the retail, defense, automotive, food, utilities, and mining sectors.
“The single best way to optimize the supply chain process is to do exactly that – optimize the supply chain, not just elements of it…”
All too often optimization focuses only on a single supply chain function, such as warehousing, transport, order management or inventory. This leads to ‘sub-optimization’ where efficiencies delivered in one area cause inefficiencies in others.
Take, for example, inventory reduction programs. Reducing inventory by purchasing in higher frequencies but lower volumes will have a great impact on obsolescence and will allow a business to reduce its working capital commitment. However, it will also impact logistics – possibly through less full loads, order consolidation and higher velocity activity on inbound warehouse movements. These elements have the potential to increase operating costs.
In this example, the supply chain manager should ensure that the increased operating costs are, at least, balanced by the savings associated with the inventory working capital reduction. This sounds simple, but in reality, this kind of balancing, through a holistic view of the chain, rarely happens.
Sub-optimization in supply chains is caused by several issues. The predominant causes are either vertical ‘silo’ management, where a single management team do not have overall responsibility for each element, or sometimes it’s just due to the sheer scale and complexity of some chains.
However, with improvements in technology, data capture and the advent of big data, it is now increasingly easy to model and simulate the supply chain as a whole. Further supporting this type of broad analysis, there is now a host of supply chain modelling systems for companies to utilise to avoid sub-optimization.
The key to optimizing the supply chain process is to think of the whole supply chain – from start to finish. The aim of supply chain optimization is not to make one function perfect, but rather to balance and synchronise all functions efficiently.
Michael H. Burnette is the Associate Director of the Global Supply Chain Institute (GSCI) at the University of Tennessee. Burnette comes to the University of Tennessee after a 33 year career as a Supply Chain executive at Procter and Gamble. Most recently, Mike was the P&G Global Supply Chain leader for Skin Care (owning 2+ billion dollar Olay brand) and P&G Global Supply Chain Leader for Hair Care (owning 4 billion dollar Pantene and Herbal Essence brands). Mike’s supply chain leadership and expertise include: supply strategy/design, manufacturing, logistics, innovation, acquisitions, and human resources. Burnette worked in supply chain at P&G for decades and has helped write almost a dozen white papers on supply chain best practices. You can obtain a picture and contact information at https://haslam.utk.edu/experts/michael-burnette.
“The best way to optimize the supply chain is to…”
Simplify. Supply chains have become increasingly complex over the last three decades with the rise of acquisitions, globalization,mass customization, omni-channel fulfillment, increased regulations and a multitude of technologies.
The single best way to optimize your supply chain starts with simplification. Driving non-value added complexity out of the system can reduce cost and improve customer service immediately. It also ensures that the product design, materials, packaging, process, equipment and operations are optimized before they become standardized, which is the next step in taking systems to their optimal level.
Companies can gain big wins by focusing on three things when simplifying:
- identifying whether the task adds value that the customer can see
- making SKU management decisions at high-level, strategic meetings with multiple business functions represented and
- harmonizing products so that they can be sold in all or multiple regions of the world.
Victor Ong is the Director of Marketing at Premio Inc. He’s a veteran salesperson with over 10 years of experience in the B2C, B2B, channel sales, and OEM sales arena equipped with proven track record of growing revenue and profitability in the underdeveloped, under-penetrated territory.
“A supply chain should cover all of the logistics….”
I think that having an ERP system, enterprise resource planning, is really beneficial to a company to ensure that it has a transparent supply chain. This system is really the key to the supply chain process. The ERP system makes the various functions of business more simple and easy to track. The software integrates all these functions into one system. This one system becomes the database that can be accessed by employees of the company, they can tap into the information provided for their own specific tasks. The ERP system is so useful because it can retain information that starts from forecasting, to when products are actually demanded, and to the fulfillment of the order to the customer.
The ERP system works in real-time making it easier to fix and make adjustments as they are needed in a business. In Premio, we offer in-house customization which is our niche and strength. This customization makes orders specific and easily traceable through our ERP system. Businesses isn’t the only party that benefits from an ERP system, customers benefit from using this system as well. Customer’s payment information is simplified with the system. This is the only source they need to complete billing and payment information and to track their product.
Jessica Thiele manages all marketing efforts for VL OMNI, an agile and scalable data integration platform that specializes in strategic supply chain data integration for the omni-channel B2B/B2C community.
“Eliminate manual efforts…”
It’s simple to lay it out in writing: integrate and automate your key data flows, and reduce or eliminate manual data entry or manipulation jobs. The benefits are obvious and real: automated data integration means no more human error and the potential for infinitely faster data transfer, ultimately coalescing in saved time and money. But buyer beware: plug-and-play and DIY programming solutions may look great from afar, but may not be the best solution for your business. When in doubt, call in an expert opinion – reputable companies will be willing to offer (free) advice on where you should turn if you’re not a fit for their solution.
Tracey Smith is regarded as a thought leader in the field of analytics and speaks extensively at conferences. She has over 25 years of experience in applying data analysis to business problems in Supply Chain, Operations and Human Resources. Tracey holds degrees in Applied Mathematics, Mechanical Engineering and Business.
“The single best way to optimize the supply chain process is to…”
Use data analysis for better decision-making.
Begin with the simplest form of analytics, namely metrics and KPIs (key performance indicators). Align your KPIs to measure the success of goals and objectives you need to achieve in your supply chain the next 1-2 years.
Next, use data analysis to identify opportunities for cost savings. For example, study your customer ordering patterns and see if the amount of inventory you are carrying is correct. Extra inventory on the shelf is money tied up that the business can’t use for other initiatives.
Conduct a separate data analysis to determine opportunities to consolidate your supplier list by grouping together similar products and determining whether you can obtain volume discounts by using fewer suppliers. Identify any “rogue spend,” i.e. purchases being made outside of your supplier contract base that may be costing extra money.
Jake is a professional journalist living in Los Angeles who has his hands in many different arenas of writing. In addition to holding a position as the head of the creative department for TruckDrivingJobs.com, Jake also frequently submits articles to entertainment publications.
“The single best way to optimize the supply chain process is through…”
Ensuring that the distribution aspect of the chain is utilizing similar and modernistic technology in accordance with the other links of the supply chain. This comes into play when commercial vehicles are the mode of transportation, as the industry begins to transition into a more unified and accepted use of technology. Still, the use of electronics in trucks is incredibly stratified across different carriers and fleets in the company. Until a systematic change in the use of truck technology is implemented, this may be one part of the supply chain process that proves to be remarkably bogged down.
Joe Oliaro is the Managing Director, Global Corporate Services, Logistics and eCommerce Specialist at Newmark Grubb Zimmer.
“Baby boomers make up over 50% of the workforce and there is a huge demand for truck drivers right now…”
As autonomous trucks begin to enter the market in the next few years we will see a revolution in optimization of the supply chain due to the simple fact that we’ve removed humans (weakest link) from the driver’s seat. I believe this will also open up job opportunities for skilled positions and techs that will support the growth of autonomous vehicles.
Rick Armstrong is not your typical CPA; he decided long ago that taxes and auditing would not be his niche. Rick has dedicated his career to developing innovative solutions to business problems utilizing the latest, best-of-breed accounting technologies. His expertise and unique skills in accounting and technology help organizations maximize their IT investment, with QuickBooks as well as Virtual Server Networks.
“Information is key to managing a supply chain…”
Kara Atchison is the General Manager of Lone Star Technology. She founded Lone Star Technology in December 2014 to serve small to medium sized companies who make products and need dependable quality.
“The best thing you can do to optimize the supply chain process is…”
Get your specifications and verification methods in order and to make sure everyone on the team understands them. The biggest issue that I see in sourcing stems from communications and follow up. After you’ve got the specs in order, then you still have due diligence tasks such as auditing suppliers to understand how they manage quality and pricing, and monitoring the progress.
Mike Bates is founder and CEO of HotWax Systems, the world’s leading authority in the Apache OFBiz and Moqui open-source software frameworks, and creators of HotWax Commerce, the Unified Commerce platform. A lifelong advocate for open technology, Bates has donated over 75,000 hours of development to ASF projects, and provided countless internships and training opportunities for engineers around the world.
“When it comes to effective omnichannel commerce, your business is only as strong as your supply chain — and operational visibility is an absolute game-changer in that respect…”
According to a survey by GS1, retail inventory is only accurate 63% of the time. You probably couldn’t even imagine not knowing where 1/3 of your inventory is at any given moment. But, if you are the one in two retailers who reportedly still track inventory separately for each of their sales channels, your blindspot is likely just as substantial.It is only when traditionally separated departments, operations, and processes are allowed to interact and exchange information within a shared system, be it on a single native platform, or a system of natively integrated software, that stakeholders are empowered to take control of their roles. By tapping into a live pulse of the company, unadulterated by faulty data, managers gain a super power and can actually start fine-tuning and cranking margins.We know without a doubt that companies which optimize the technology behind their supply chain, gain more flexibility, react faster to market changes, turn challenges into opportunities, and dominate the space.
Paolo Dell’Aguzzo is a gaming programmer who has had a passion for computer science since childhood.
“Since 1960, a lot of companies saw that the supply chain process had some problems and that the best way to earn more should have been to have a better supply chain process…”
Companies were always making the same error. Take a lot of pieces, build a large number of products, and at the end sell it to markets. The supply chain is a really particular chain because you don’t have to build something tangible, but you need to create value for customers! Toyota was the first company in the world to understand this point.
So they have introduced the Lean methodology. For example, Toyota tests cars with customers and doesn’t fill their offices with all the possible pieces that a car could need. Every time a new piece is used the office calls a greater office for the same piece, and this chain propagates until it reaches the main Toyota unit. Eric Ries, in the Lean Startup book, talks a lot about this topic.
Miguel Fajardo is the logistics manager at ShipMonk.
“Outsource as much as you can…”
So many eCommerce companies we work with run stagnant for years because they keep so many aspects of their supply chain in-house. Fulfillment, inventory management, even manufacturing – unless these tasks are essential to your core business operations, you should outsource them immediately. Not only will doing so allow you to benefit from economies of scale, but you’ll also find that you will have more time to focus on your business’ core operations.
Bob Ellis is the owner of Bavarian Cuckoo Clock Shop, an e-commerce store that sells authentic Black Forest cuckoo clocks.
“Study your inventory and sales history…”
One of the most effective ways to make a supply chain more efficient is to analyze which products move fast and which ones are more slow-moving or seasonal. With these insights, you can organize your products into different segments based on how many you plan to sell in a given period. This will help you know how much of each products to order from suppliers so that excess inventory isn’t sitting in stock.
Anna Morrison, MSN, ARNP, FNP-BC is the Co-Founder & CEO of The No BS Supplements Co.
“Optimizing my supply chain means making sure my processes are standardized across the board…”
I strive to make sure the same programs and processes are being used at every step. I also have software alerts set up for low inventory which could really hurt my revenue. When working with health supplements, compliance and quality are also an incredibly important part of the process. Keeping a high standard at every turn ensures that my customers can continue to count on the high quality of my products.
Valeriia Timokhina is a marketing manager and blog editor at Eastern Peak, a top-ranked European software development company focused on helping startups and midsize businesses reach their full potential by building great websites and intuitive mobile apps.
“The best way to optimize the supply chain in the future years is…”
IoT automation. Advancements in the Internet of things and AI sphere will provide an opportunity to completely automate supply chain process and eliminate the human factor forever. Implementation of IoT solutions for supply chain will be a significant step forward for business: increasing KPI, reducing expenses, real-time remote monitoring and predicting issues. Judging by the number of IoT projects we’ve received in the past two years, more and more businesses realize the benefits of IoT automation.
Bruce founded Macola Software in 1982 as a provider of business management solutions. After Macola was acquired by Exact in 2001, Bruce spent several years working directly with customers to understand their business software
needs. He used this knowledge to start WiSys and bring the concept of real-time Warehouse Management to Macola customers.
“The single best way to optimize supply chain processes is to…”
Utilize mobile technology to gather real-time data. In the past, desktop business software required keeping paper records and then manually entering that information back into the system at a later time. With the advent of mobile devices, those transactions can be pushed out onto the floor where they really happen. By doing this, businesses can eliminate a lot of the daily manual work that had to be done after the fact and keep information updated in real-time. Real-time recording of data optimizes supply chain processes through fewer errors, increased productivity, reduced inventory, better traceability, improved customer service, better decision-making and lower costs.
Kim Pen holds a master’s degree in mechanical engineering from UTC in France. He has earned his stripes in factory operations as quality director and general manager of Chinese factories. Kim is the founder and CEO of Workshop, a Shenzhen based manufacturing hub, to help hardware startups with the pains of manufacturing.
“It is important to optimize locally by having real time visibility, combining demand forecasting, actual sales data and inventory management…”
With this information we know exactly what has actually been sold, what is actually coming, and what is currently in inventory both locally and globally. With these 3 items, we can make the supply chain fluctuate without having an impact on anything because we can manage the production and procurement in its early stages, as we know the needs and the procurement and production lead-time. It is a very simple data driven tools to set up even possible for small BOM product on excel.
For supply chain optimization, you need to combine air shipment and sea shipment (which also represents a storage period). The air shipment will compensate the fluctuation of the demand, whereas the sea shipment will periodically have a have fixed quantity. With real time visibility, we may even stop an air or sea shipment, so that the production and procurement will be directly impacted preventively.
You have to optimize the supply chain locally by coordinating the suppliers. You need to have a team dedicated to manage this locally, within the supplier factories to be directly involved in the quality inspection and production planning. The local team will have the right time to make changes with the suppliers and being on a Just-In-Time
The key to optimization is visibility and sharing real time data for every level of the supply chain from both locally and globally.