5 Best Practices in Supply Chain Management
The impact of globalization, technology, and increasing competition has resulted in significant transformation in the supply chain today. Innovative measures and an effective strategy are essential to managing supply chain activities in an organization.
As the supply chain works at a global level, the companies will have to face several challenges and meeting customer satisfaction is also another important factor. They can stay relevant in the market and fulfill the needs of the customers by practising the best practices in the supply chain.
So, what are the supply chain methodologies and best practices? Let’s explore it in detail.
Transparency is inevitable in every business process. Nowadays, governments, media, stakeholders and even customers demand transparency in the supply chain of big companies. This need is mainly raised to know if any illegal processes are involved and also to ensure quality.
Organizations not complying with this rule may face a negative impact on their reputation. They should maintain clarity in the supply chain operations internally and externally to avoid any kind of challenges. It is essential inside the organization as it helps everyone to take any decision at a critical moment to reduce risks.
Control inventory levels
Ideally, you should have optimal levels of inventory. An increase or decrease in the inventory levels can have negative consequences. If an organization has more number of raw materials/products than the requirement, it will lead to wastage. Likewise, lack of inventory can disrupt the flow of the supply chain that will end up in customer dissatisfaction.
Monitor regularly to reduce risks
The supply chain processes should be regularly reviewed to ensure they are efficient and designed as per the current practices. It helps in streamlining operations along with reducing the risks of fraud. The organization should set key performance indicators and monitor everything based on that. The organizations that don’t have set standards may compromise quality.
Prepare a strategic sourcing strategy
Strategic sourcing is a process of institutionalizing the purchasing process in order to improve the efficiency of the supply chain. It reduces redundancies, lowers costs, improves quality and collaborative relationships. It involves checking everything in the purchasing process including the selection of vendors, goods, price, and quantity. It is a continuous process that aims at optimizing supply chain management.
Collaboration with suppliers
Supplier relationship management is a relevant aspect as a long-term relationship with suppliers is beneficial for the organization. For this, one-way communication in which the organization instructs the supplier, should be replaced with two-way communication wherein both parties are involved in decision-making. It will help to maintain a healthy relationship, find quick solutions to problems and enables better supply chain management which ultimately results in having satisfied customers.
Following the best practices in the supply chain is extremely significant in the current scenario as it can improve the overall quality, customer satisfaction, and the reputation of the organization.