Getting customers what they want, in a timely manner and at the lowest possible cost (without sacrificing quality) is the foundation of any product-based business. If you’re spending too much to meet consumer demands, experiencing delays in getting products to end customers or production disruptions, it’s time to focus on optimizing your supply chain.
From raw materials sourcing to warehouse operations, logistics technology, order fulfillment and beyond, there are dozens of points throughout the supply chain, all of which contribute to overall supply chain efficiency. That means there are many potential areas for improvement, and that’s why supply chain optimization begins with an evaluation of the status quo to identify shortcomings. But overall, what tactics do supply chain leaders find most effective when it comes to supply chain optimization? To find out what’s working for today’s companies, we reached out to a panel of supply chain professionals and asked them to answer this question:
“What’s the single best tactic to optimize a supply chain?”
Meet Our Panel of Supply Chain Pros:
Here’s what our panel had to say about the best ways to optimize a supply chain.
Misha Kaura is the CEO and Founder of Darlinghurst Enterprises (technology and fashion).
“Eliminate as many points as possible by bringing as much in house as possible…”
So that the model is reduced to A to B. I am buying a sheep and goat farm alongside a larger space for a garment factory so that I can control where the cashmere and wool is coming from, how it is processed and how it is manufactured before it is sent to my customers. It is absolutely imperative to be in a position to do as much quality control as possible in house, so that all that is required thereafter is shipping from the manufacturer straight to the customer. A lot of my colleagues spend enormous resources and headaches trying to find reliable manufacturers, and I knew early on, from day one, that I wanted to have everything in house. I think when your business is self-reliant, you never have to deal with lost shipments, late shipments or anything. Things are produced on time, on standard and exceeding customer expectations in the process. It’s not a sustainability thing; it’s a common sense thing. I have done well with my common-sense approach to fashion manufacturing in spite of being bootstrapped the entire first 18 months. It costs much less in energy and time to do everything in house.
Dr. Scott Newton
Dr. Scott Newton, VP for Care Model Solutions at TeleTracking, has more than 30 years of experience in healthcare — working as an EMT, a nurse, an educator and a patient flow command center leader — he is also a trusted adviser and thought leader. Scott has a deep knowledge of the healthcare system and understands that success is tied to high reliability, just-in-time responses and responsible solutions — that it’s about getting it right the first time for patients and clinicians.
“Given the nature of our business, TeleTracking has a relatively short supply chain…”
Our principle supplies come from providers of cloud-based systems, and companies which supply us with hardware and office equipment. We also use contractors to provide data coding services. We optimize our supply chain by focusing on our core strengths and outsourcing other activities (like data coding), utilizing mobile technologies and ensuring that our supply chain is responsive.
William Crane, Founder & CEO of IndustryStar Solutions, is an entrepreneur and experienced executive in supply chain with demonstrated results starting, launching and enhancing procurement, logistics, supplier quality and manufacturing companies globally. He has led supply chain organizations in the consumer electronics, life sciences, automotive, medium & heavy-duty truck, energy and food & beverage industries.
“Cloud-based supply chain software, when combined with professional support to aid end-to-end supply chain operations…”
Closes the gaps in business process outsourcing services that focus on tactical functions within supply chain. Using cloud software, supply chain teams can do things like assign project tasks, build supply bases and manage their Plan for Every Part.
This type of web-based platform provides flexible collaboration and communication for supply chain projects and teams of all types, in one application, accessible anywhere. Its scalable structure, customizable access and KPI dashboards help supply chain teams maximize efficiency and performance, reducing product launch times, bill of material costs and program launch risks in addition to improving cash flow. We’re telling companies: scrap your spreadsheet; there’s a better way to manage this data.
Sankar Gopinath is a digital marketer with Syndicate RFID with more than 6 years of experience in B2B marketing. Sankar has worked in numerous projects in multiple industries including asset tracking & supply chain.
“Having a comparable process and progress comparison chart would be the ideal way to optimize a supply-chain system…”
Usually, firms do a trial run on many solutions and processes that come to their attention just after a cost-benefit analysis has been conducted. If viable, they adopt the solution/ process. Plotting together an agile method could work very well in the supply chain as it allows for flexibility in the adoption of new methods of getting things done in an efficient manner. So, overall, I can say that having a defined process with the agile method that helps in incorporating new technologies is the best tactic to optimize the environment of the supply chain.
Certain systems use barcodes to track objects. This is a manual process involving human effort and excess working time. The same could be achieved with RFID technology in much less time and effort. If the cost-benefit analysis ratio is in favor of adopting RFID, it is an obvious choice to adopt the more beneficial method. Then again, if the whole supply chain is designed in such a way that the overall system demands barcodes, RFID adoption might not be possible at all. I mentioned the above scenario just to illustrate the importance of having an agile approach towards supply chain. Provided agile was in place, the adoption could have been possible since segmentation of processes is the specialty of the method.
As mentioned above, applying newer technologies in various processes and comparing the advantages and disadvantages is the best way for a supply chain system to reach out to the future optimized version of itself.
Kerri Byron is the Marketing Manager at Cortera, Inc. — the fastest growing commercial credit network in the nation.
“With 3,000 companies going in and out of business every day and 99% of companies in the US being private, it is critical to…”
Keep tabs on the financial health of businesses in the supply chain with which you interact. You can do this by implementing automated portfolio monitoring. From the first point of extending credit, customers, prospects and suppliers should be monitored for any changes in risk associated with their account. Particularly within the supply chain, by putting automated monitoring into place, you’ll know the financial health of the companies with which you do business and thus be better positioned to profit and mitigate potential risk.
Charlie Kim is the president and CEO of Soom, a mobile and cloud-based enterprise SaaS platform that provides medical device manufacturers with a simple solution for ensuring master data accuracy, eliminating supply chain backlog caused by data errors and, ultimately, improving patient safety.
“To transform a supply chain into a true value chain…”
The consumer must be paramount. Consumers demand complete and accurate product data when searching for a product, which ultimately influences their buying decision.
Joseph Heller, 37, is the Founder and CEO of The/Studio, the first on-demand, custom manufacturing platform for product creation. The/Studio offers users, regardless of size, the ability to create products through a custom manufacturing supply chain in the cloud. A graduate of UC Berkeley, he resides in Los Angeles.
“The best tactic to optimize supply chain is…”
Implement strong communication tools across different teams to ensure speed and accuracy. Manufacturing a product is still extremely complicated, and traditional supply chain teams were not set up to support the quick turnaround times and small-batch requirements of modern retail. Big box retail is being replaced with pop-up stores, limited edition e-commerce offerings and millions of new brands. There is now an incessant race to get products to market quicker, to pinpoint customer demand with data and to be nimble enough to scale accordingly.
Mark Hampton, principal of Supply Chain Synergy Consultants, has 40 years of experience in hospitality operations, distribution, supply chain and executive management. With an Executive MBA in Strategic Management coupled with real world experience, Mark is able to provide astonishing results to his high profile clientele.
“The single best way to optimize a supply chain is…”
To look at the Total Cost of Ownership (TCO) in order to analyze the complete value of a specific good or service throughout its lifecycle. This value includes every phase of ownership: acquisition, operation and the softer costs of change management that flow down from acquisition (such as documentation and training). TCO is important because it shows you what you will end up spending over the long-term so that you can adequately weigh the cost / benefit of it to your business model before you make the purchase.
Mihai Corbuleac is a Senior IT Consultant at ComputerSupport.com, a nationwide service provider that helps business executives get the most out of their technology investment.
“We always tell our clients that one of the best tactics to optimize a supply chain is to…”
Automate as much as possible to increase its efficiency. Implementing warehouse and supply chain automation doesn’t make sense for every type of business; sometimes the human touch is imperative, but accurately assess how technology can improve your operations. Also, if your executive board decided that it’s time to automate and changes are implemented, make sure that all automated parts are carefully maintained. Extra training is usually necessary, so ensure that your staff is prepared.
Jake Rheude is the Director of Marketing for Red Stag Fulfillment, a fulfillment warehouse born from eCommerce. He believes that automation will make jobs easier, not obsolete. He loves University of Tennessee football and thinks his black lab Reagan is the best dog.
“You can have all the fancy machinery and software you want, but the bottom line is that we’re still pretty far from the singularity…”
Human labor will continue to perform the most essential tasks in warehouses for the foreseeable future.
Will robots or software augment those tasks and make them easier and more gentle on the human hands that do the work? Yes.
But ultimately, the single most valuable asset any supply chain has are its people. If you want to optimize your supply chain, the way to do it best isn’t to buy some fancy new machine. It’s to hire competent folks who have bought in to your company’s culture. It means compensation that gives peace of mind, while also rewarding outstanding performance. It means providing the best facilities for your people to feel as comfortable as possible, and it means creating a work environment that is welcoming and encouraging. Turnover is one of the most costly variables — not just for supply chain companies, but across just about every industry. So if you invest in your people, you stand a strong chance to reduce turnover and make the wheels of your operation, whether it’s a warehouse, trucking company or labor staffing company, move more efficiently.
William Vogt is the founder and Managing Principal of Weilian Poder Global Consulting, an advisory firm focused on supply chain optimization, quality control enhancement and international business partnerships.
“Process determines success, so having consistent standards is…”
The foundational component behind every good supply chain. This is especially true in cross-border and intercultural situations where good communication (and translation) are vital.
Alexandra Zelenko is a Marketing and Technical Writer at DDI Development company, which delivers web and mobile digital solutions for a wide range of business expertise, such as recruitment, fintech, CRM, e-learning, logistics, etc.
“Managing a supply chain is not easy work…”
Artificial intelligence, machine learning and other technologies have already been implemented in the process of optimizing the supply chain. However, there is another new technology — blockchain — that is ready to optimize a supply chain and change the game. Being a digital ledger of integrity, blockchain technology can store records for every product or asset — it looks like a history for every single product or asset — from when it was made to when it was packed, shipped, moved, displayed and sold. The logic of blockchains is every single piece of product or asset cannot exist in the same place twice and its every movement is visible to all supply chain participants and can be tracked in real-time that helps to improve processes and enhance business models.
Gabriel Gheorghiu is a Research Principal at G2 Crowd. Gabriel’s background includes more than 15 years of experience in all aspects of business software selection and implementation. His research work has involved detailed functional analyses of software vendors from various areas such as ERP, SCM and PLM.
“Get to know your supply chain…”
Companies don’t always know what’s happening in their supply chain network, and this can have serious consequences. Here are a few examples:
1. Conflict minerals and forced labor can negatively impact a brand, which may translate into lower sales and sometimes lawsuits. For instance, the fashion industry is one of the most polluting in the world (according to the Changing Markets Foundation) and work conditions are notoriously bad, especially in developing countries. Companies who are willing to address these issues are more likely to attract and keep loyal customers who care about this type of issues.
2. Recalls — even companies like Tesla are having a hard time determining how reliable their suppliers are. While it is true that Takata was the largest manufacturer of airbags in the world, the low quality of their products made them a poor choice and caused the largest safety recall in history.
3. Fraud and counterfeit products are big issues in supply chain management. While platforms like Amazon are trying to address this issue, they are having a hard time finding the right solution.
One may think that this only happens to large, multinational companies. That is not the case — the globalization of commerce made it possible for any company to buy products or outsource manufacturing overseas.
How can companies get to know their supply chain? It doesn’t necessarily take sophisticated software and expensive services. Companies can start by finding reliable online sources to learn more about the suppliers they intend to do business with:
- Better Business Bureau
- Foundations like Global Witness and Changing Markets
- US Securities and Exchange Commission
- Sustainable Leadership Purchasing Council
- Find reviews, references and testimonials on platforms like G2 Crowd, Glassdoor, Trustpilot or Moody’s and Bloomberg for financial information
Josh Meah is a marketing entrepreneur who has built 4 different profitable marketing companies that serviced over 15 industries. Through his personally branded agency, JoshMeah.com, he and his team currently operate successful client acquisition systems affecting 27 different industries.
“Hire an experienced supply chain manager…”
Technology, metrics and systems are crucial, but the importance of experienced leadership and a clarified expectation for operational excellence cannot be overstated. Great people and work cultures create and reinforce environments that decrease errors and inefficiency.
Robert Eisenstein’s website, CardboardandCoins.com, is the central marketplace where folks go to buy baseball cards and all sports cards, coins, Pokemon cards and comic books, without having to experience multiple shopping cart hysteria, because everything is all under one roof, all from one vendor and further, shipping is always 100% free. They were also one of the first collectibles sites to take Bitcoin and Alt coins as forms of payment, and they have flexible payment terms to make folks feel at home, as well they should be, while enjoying their hobby.
“Honestly, the best tactic to optimize a supply chain is to…”
Know your suppliers/vendors/manufacturers (all of which are the same)…basically, know your source! The confidence that you derive from creating a deep relationship with your supplier/vendor/manufacturer speaks volumes to the level of success you will have in maximizing your supply chain. I find it gives us a feeling almost of invincibility when it comes to meeting larger requests down line from the supplier.
Ed Rossiter has 20 years’ experience in purchasing across Asia for global companies. He’s also the owner of Kaulbach House, the leanest B&B in Canada.
“There are two tactics for optimizing your supply chain…”
Supply chain is about having the right amount of inventory. Stock reduces lead time but adds to costs. How to optimize stock? Two simple principles:
1. Safety stock is a dynamic not fixed and should change based on forecast.
2. Cost of carrying inventory in business calculations should be the true cost including:
- Scrap costs
- Weighted average cost of capital
- Stock management
- Shrinkage, sweethearting, etc.
These two edicts will change the way you manage stock and focus efforts on reducing lead times.
Michael Decatur is the CMO at Truxx, Inc.
“Your supply chain is the lifeblood of your operation…”
Not only does it affect your ability to meet demand but the quality and cost of your supply chain impacts cost of goods sold and, in the end, profitability and competitiveness.
At the same time, due to their varied nature finding efficiencies within supply chains is difficult. It’s hard to manage at a scale that meets the most demanding aspect of your business while at the same time not extending unnecessary overhead for the small scale aspects of your supply chain. One practice we see at Truxx is utilizing “as a service” solutions to meet scale. For example, we have a number of operations who utilize the Truxx service for just-in-time jobs where full scale trucks are too expensive. Taking advantage of such services enables you to optimize and meet demand without unnecessary capital expenditure and minimal impact on cost of goods sold.
Robert DeStefano is a senior product marketing manager at Ivanti Supply Chain. He has more than 18 years of experience helping businesses understand the value of mobile technology solutions when it comes to boosting worker productivity and enforcing mobile security.
“Many supply chain firms, retail and warehousing organizations, faced with growing demand to cut costs and improve productivity, are now looking toward…”
Modern mobility solutions to help them achieve these objectives. Migrating to new mobile technologies, such as Android-based platforms, can optimize the supply chain and drive enormous growth opportunities for these businesses. And, with a little planning and preparation, mobility can also help these businesses ship faster, strengthen customer satisfaction and may even help to reduce the bottom line through improved operating margins.
Mark Beckner, Owner/Principal at Inotek Consulting Group, is a proven national expert in the design, implementation, programming and customization of CRM systems. He provides services in the architecture, planning, migration, implementation, programming and development of Microsoft Dynamics CRM systems, and is the author of a successful technical book on Microsoft CRM and is fluent in the xRM environment.
“The single best method to optimize supply chains is to…”
Ensure there is dynamic visibility into assets and processes associated with the distribution of these assets.
In businesses where high volumes of manufactured items are distributed, the ability to track and identify items is critical. The tracking of these assets is handled through ERP and financial systems, inventory management platforms and RFID technologies.
Modeling the processes that these manufactured items follow from creation, through shipment, to ordering, invoicing, delivery and returns is also essential. These processes can be modeled and built on CRM platforms, using both on premise and cloud-based options.
Once assets are tracked and processes are followed, the final step in the process is to be able to report on and mine the data being collected. Being able to see metrics such as how long products take to route through the systems, what delivery and return rates are by region and what data looks like over time and dimensions allows your business to go to the next level. This type of reporting can be handled through business intelligence and data mining tools, as well as data warehousing implementations.
The ability to accurately track assets, follow defined processes and model new processes rapidly and enable users to view and mine data will allow for growth and increased success throughout an organization.
Robert Rebitski is a team member at Predictable Surgical Technologies, a medical supply store.
“Building and maintaining solid supplier relationships is an important indicator of a successful supply chain…”
Supplier relationships should be cultivated on an ongoing basis instead of being dropped after you’ve finalized a deal. An open two-way communication between the buyer and seller should be the goal. Some objectives for optimizing these relationships should be agreed upon metrics for continuing improvement and value, performance measurement and a consistent platform for conflict resolution. Negative supplier relationships can have a detrimental impact on your supply chain.
Lindsey Cosgrove works in marketing at Beekeeper.io.
“The single best tactic to optimize a supply chain is to…”
Invest in a digital workplace tool for your front-line workers. Integrating big data-driven predictive models into your front-line workflows can be a complete game changer, and if done right, can help set your employees up for success in the following areas: team-wide task visibility, trigger-based workflows, inline translation and more streamlined and clearer communication.
Nate Masterson is the CEO of Maple Holistics, a company dedicated to cruelty-free, natural and sustainable personal care products.
“The best way to optimize your supply chain is by…”
Allowing your information flow dictate autonomy. If any team member needs to ask who does what, it means that they had to first go to you discuss the issue with you and that leads to more talking and less doing. It also leads to two or three separate interactions that could have been just one. This may not seem like such a big deal, but over a whole day if your employees are pigeonholed in one or two projects and don’t interact with all the team members problems take days instead of minutes to solve. For best results, homogenize projects so that everybody works with everybody. When there is no pecking order, problems get solved in a fraction of the time leading to much less fallout.
Katia Kozak is the director of client services at ODYN, a web enabled platform that combines low cost IoT devices and AI powered analytics to help manufacturers optimize in-transit inventory, decrease working capital spend and increase synchronization and customer service levels across all levels of the supply chain.
“Most companies will build out a value stream map for each of their products once a year and make big Kaizen event changes based on the results to optimize their supply chains…”
It’s a laborious and time-consuming process. Kaizen event changes have the potential to go wrong in many ways — there may be important impacts that are not considered because of the limitations in building out a value stream map manually.
The single best way to optimize a supply chain is by using an automated value stream map to make and monitor the results of incremental changes. The most cost and time effective method is by using low cost IoT sensors. This allows for monitoring of a statistically significant portion of shipments to remain cost effective while building out and monitoring an automated value stream map. Supply chains are living and evolving every day and should be continuously monitored to ensure they are performing as expected. Analytics are obviously an important component of this; you must be able to sort through potentially millions of data points to find something worthwhile.
IoT sensors will give you pallet (or case) level data for outbound visibility into customer’s supply networks, giving insight into how product is being used, which allows for better forecasting. Imagine there is an IoT sensor on a pallet that goes to a customer’s distribution center, and then to the customer’s final point of retail and what could be done to improve existing processes using that data on a large scale. In parallel, partnering with suppliers to provide them with IoT devices gives inbound visibility for shipments which allows for optimizing production schedules while avoiding delays.
To summarize, IoT devices are the best way to optimize supply chains in several ways. They can be used to build out automated value stream maps and show you how much product is sitting where and for how long. They can be used to gain visibility into your customer’s supply networks and give you inbound visibility from your suppliers.
Kevin Dugan handles global communications for Apex Supply Chain Technologies, the world’s leading provider of self-serve automation. He is an award-winning professional with experience spanning marketing communications, public relations, content marketing and social media. Dugan has more than 25 years of experience helping companies big and small tell their stories.
“Ultimately it takes a mix of people, process and technology…”
Self-serve automation is one technology contributing to supply chain optimization by eliminating time-consuming tasks and allowing employees to focus on more valuable work. By helping manage, track and control vital warehouse/DC equipment like handhelds, picking wearables and other mobile devices, self-serve automated lockers help lower costs and increase productivity.
Smart locker solutions offer a straightforward process for managing high-value equipment. Facilities can come to a complete standstill without handhelds and picking equipment, but most companies do not manage or control it. This creates a variety of issues, including device hoarding and loss. This results in low employee productivity, wasted time and frequent repairs and device replacement.
By providing a secure environment to protect a company’s significant investment in mobile devices, the process improves dramatically.
- Decrease Costs: Costs decrease with a more productive workforce and less-frequent asset replacement. In fact, companies see as much as a 40% reduction in device replacement costs.
- Increase Employee Productivity: Automating the device check-out and return process increases productivity, as assets can be deployed at the point of work throughout a facility. This also reduces “walk-and-wait” time.
- Make Devices Available 24/7: Employees check out assets using personalized ID cards or codes. This ensures they have access to the tools needed to do their job, and these tools are ready when they need them.
- Managers Work Smarter: Managers can focus on more important tasks since they do not have to help locate missing assets. If devices are not returned at the end of a shift, or if a device needs service, managers automatically receive alerts. Management can easily access the platform through a secure web portal or mobile app.
CEO and Co-Founder of PayPie, Nick is a serial fintech entrepreneur and a member of the Forbes Technology Council. His more than 20 years of experience work with small businesses and the accountants who serve them informs his frequent speaking engagements and underscores his commitment to providing better solutions.
“Blockchain and distributed ledger technology have the potential to revolutionize accounts receivable by…”
Reducing the amount of back and forth involved in sending an invoice through several incongruous databases. With a distributed ledger, the invoice is hashed to the blockchain where all the participants can securely access it in real time to track receipt, delivery and payment.