It’s that time of year: Cupid has his arrow at the ready; people are scrambling to get that perfect card, bunch of flowers, chocolates, presents or restaurant reservations to show their love and affection as they try to secure that perfect partner. It’s safe to say Valentine’s Day is at the top of mind for many individuals, including supply chain managers and logistics professionals! With that being said, as much as one can hope for the perfect partner – is there such a thing? The same could be asked about a supply chain: is there such a thing as the perfect supply chain, and is it really attainable?
Perfect is a subjective term. It can be defined as: having all the required or desirable elements, qualities and characteristics and as highly suitable for something or someone. As a result, perfectness cannot be standardized because it is subject to interpretation. Something that is perfect for someone else may not be perfect for you or vice versa.
A supply chain is a network between a company, its employees, its actions, and the information and resources involved in creating and distributing a specific product or service, each link represents a different step involved in getting the product from suppliers to the end user. Every supply chain is different, from different products, services and markets to company values and goals. Therefore, a generic supply chain strategy cannot be implemented for every company. This implies that a perfect supply chain is individual to the company and can be adapted to suit the needs of other companies.
The perfect supply chain can be regarded as more of a concept consisting of a company selling the products it has produced quickly and delivering them to customers as soon as they are demanded, with the essential goal of getting the right product to the right customer in the right place at the right time.
Some people have a checklist to find the perfect person they’ve been waiting for, listing specific attributes. Now, I believe this method could help to unearth that perfect supply chain. If the same principle of this checklist was applied to supply chains – it would most likely include some of the following characteristics:
Have an appropriate supply chain strategy in place
In order to have a well-equipped supply chain that enables a smooth process of finished goods being delivered in a timely manner, it is essential to have a thoroughly devised strategy. Factors such as demand, product lifecycle and markets, customers and other stakeholders need to be taken into account before deciding what strategy to adopt. This can lead to increased efficiency and competitiveness as well as cost reductions. There are a variety of strategies to undertake including agile, efficient, and responsive. Each strategy is determined by demand and supply uncertainty. Therefore before deciding on a strategy, an evaluation of the company’s supply chain is necessary as well as taking into consideration the company’s values and previous strategy.
The right Connections
On a perfect partner checklist, you’ll most likely find having a good connection with your significant other written down. In the business world, connections mean everything; from receiving those vital raw materials from suppliers in order to create your products to logistics providers transporting the finished goods to consumers. All of these interdependencies have a major overall impact on operations and efficiency and ultimately a knock-on effect on profitability and the reputation of the company. For example, a late delivery of raw materials can cause further delays on the production process, particularly if just-in time manufacturing is used, and then ultimately retailers or customers receive the products late. A frequent occurrence of this could cause customer dissatisfaction. Within a supply chain network, there’s a lot of trust and reliability required, so choose your business relationships wisely. Base these decisions on reputations and the company’s needs as good established relationships are essential for operations to run smoothly and solve any problems quickly.
The following attribute partially follows on from the previous one. Trust is a major part of any relationship. In supply chains, a company has to rely on internal departments as well as many other businesses in order to conduct its operations. Other stakeholders, such as consumers, also have a certain amount of trust invested in the supply chain. Consumers are increasingly depending on and demanding companies to provide them with all the information regarding the origins of products. This is particularly the case in the food and clothing industries. As a result, transparency in the supply chain has become more and more important. With this trend becoming more of a constant, it seems that having a perfect supply chain and being transparent have some type of correlation. Transparency can help large companies with complex supply chains regain control and visualize their whole operation. Consequently, improvements can be made which can help ensure consumers receive their products on time.
Communication is key; typical relationship advice. Communication throughout the whole supply chain is of high importance. As a result, every stakeholder in the supply chain is on the same page and knows what is required to achieve the goal of getting the final product to the end user in a timely manner. Furthermore, with effective communication with internal and external stakeholders, issues can be brought to light and supply chain processes can be improved to ensure overall business objectives are met and that the supply chain runs smoothly.
This article provides some ideas for what contributes to a perfect supply chain. Some would say this is an impossible task. However, in my opinion, if supply chain managers can give customers what they want, when they want without compromising on overall company objectives including, for example, reducing overhead costs and being more profitable than the year before, then they might just have the perfect supply chain.
What are your thoughts on the perfect supply chain?
Header photo: Iaroslav Neliubov/shutterstock.com