During the past decade, supply chain management (SCM) has gained strategic importance for middle-market organizations. Recruiting, retaining and developing the right talent is important; however, the right processes and tools to support that talent are essential to achieving the best performance from the supply chain operation as a whole. Without a smoothly functioning supply chain, your organization cannot predictably meet its business goals.
To create a successful supply chain, cross-functional processes within the company should be integrated with key trading partners. Creating standard business processes across your company benefits every link in the supply chain – individuals from different organizations will have a shared vernacular when dealing with other supply chain trading partners, including:
- Supplier relationship management – Standardizing processes for managing interactions with suppliers creates a common frame of reference that enables efficient transactions between companies that likely use different terminology and business practices.
- Order fulfillment – The concept of order fulfillment extends beyond simply processing an order to meet customer requirements; it also consists of updating inventory records, logistics and delivery, returns processing, and readjusting inventory records after a return.
- Customer service management – These processes should enable and empower your service representatives to access customer information as well as resolution support resources. Closely tied both to demand management and order fulfillment, the customer service experience can provide you with the data that you need to better understand when and why your customers buy.
Help reduce wasted time and resources by reviewing current policies and procedures. Gaining an understanding of your current supply chain processes — including the flows of products as well as information — can help your supply chain team determine where process improvement opportunities exist.
Consider a racing pit crew. They would be unable to perform their job functions as quickly as they do with only hand tools. Their teams need the industry’s best tools to get their drivers back out on the track as soon as possible. The same is true for your supply chain team: They need powerful tools that enable them to do their jobs efficiently.
Collaboration is a competitive weapon that you can use to improve business performance — forging strategic partnerships with your suppliers and trading partners to set goals, develop joint processes and share business information. Companies that effectively collaborate across the supply chain enjoy a variety of benefits, including improvements in speed, service levels and customer satisfaction. Successful business collaboration means that two or more groups or companies are working jointly to:
- Share information – You and your trading partners share information like forecasting, product descriptions, product and supply capacity, inventory, orders and bills of material.
- Plan based on that shared information – You and your trading partners jointly make decisions about strategic issues such as product design, production capacities and pricing plans.
- qCoordinate workflows – You and your trading partners share processes and software tools to synchronize an integrated data exchange between organizations for collaborative demand planning, purchase orders, sales, orders, invoices, payments, etc.
To enable this type of collaboration, mid-market businesses should select an SCM system that meets their business needs. Consider implementing a single-system solution that integrates with your ERP and also cultivates collaboration among your buyers, suppliers and outsourcing partners.
As mid-market organizations recognize the importance and hidden value in the supply chain, many have implemented business intelligence (BI) strategies to establish goals and metrics, and to monitor results. Choosing an SCM system that incorporates a solid BI reporting tool helps to control costs, optimize resources and ensure customer and partner satisfaction. For example, BI can help your business move toward better and more confident decisions:
- Analyzing overall supply chain performance – Assess metrics like qualitative and quantitative ROI, and the costs of goods produced and sold.
- Forecasting demand – Understand fluctuations like seasonal demand or price volatility to ensure your business is best prepared to meet actual customer demand.
- Monitoring trading partner performance – Evaluate product and supplier performance, identify exceptions and work with trading partners to enhance sales, improve timeliness and reduce costs as well as reveal issues with production and distribution.
During the past few decades, the supply chain has been targeted for innovations in automation, including processing solutions, software and hardware. Arguably the most important innovations have related to SCM itself. These SCM systems comprise a common database that records and manages transactions and information shared between trading partners, including company information, customer and supplier data, logistics, purchasing, invoicing, order management and inventory control.
Flexible and scalable workflow automation has many benefits for a mid-market company. One major advantage is time and resource savings, or transforming your supply chain from a cost center into a value center. When routine tasks are automated, your supply chain team can manage by exception, which not only helps minimize errors, but also increases efficiency.
Embracing automated supply chain solutions empowers trading partners to review, acknowledge, respond and monitor orders as they flow through the system. Synchronizing and automating systems throughout the supply chain increases the visibility of order and shipment status when collaborating with suppliers – allowing employees to spend less time gathering data and more time resolving issues.
An efficient supply chain team is crucial to success. Although this might not be achieved overnight, your business will benefit once everything is in place. Working in concert with your supply chain team gives you the opportunity to not only strengthen your team, but also identify areas to improve.