Ian
Shipping is the backbone of all logistics. The underlying process can be made standard and streamlined with a set of tested practices to remove complexities and increase efficiency.
1. Deliver according to customer requirements
Sounds simple, eh? But you would be surprised that this is not what people think of in the first place. Shape your supply chain strategy and structure according to customer requirements. Let’s say a customer specifies that he wants next day delivery. By all means, ensure that he gets the delivery the very next day. But in case there is no such specification, why would you pay and rush for an express delivery. Of course, it’s a bad idea to be lax. But overdoing your job here makes no sense. Do not waste time, money and effort ‘over servicing’!
2. Supply chain strategy
Have a fixed strategy in place. If you haven’t one already, work towards having one. And try improving on efficiency all the time. Document the strategy first. Centralise all SCM operations. An executive from any part of the chain must be in a position to pull out information on the shipment’s trajectory. This simplifies complexities like nothing else.
The strategy must be adaptable and change to meet evolving business and customer needs, and it needs to be flexible to accommodate sudden SCM changes.
3. Sales and operations
S&OP needs to be a well thought out process that shares information and enables people to unify across the functional departments. Before you think of deploying software to do this, come up with the process behind it. S&OP is conceptually straightforward but it is functionally tough to carry out. Eliminate slow moving stock issues, demand-supply-production schedule issues, proliferation of stock keeping units and excessive stock out issues with a good S&OP process.
4. Supply chain network
The key here is to improve reliability. Between the extreme ends of your supply chain (from suppliers to customers) you need a seamless network. Unreliability anywhere in between can cost you.
Poor network design can lead to problems like excessive handling, too many stock locations, and poor utilization of distribution centers. All these can increase your costs needlessly. An efficient network chain needs clarity on customer service offers, customer locations and lead time, service expectations, supply points/lead times, current network performance, facility costs, inventory costs, transport costs (inbound and outbound), service performance, test and quantify alternatives for least-cost networks etc.
5. Outsourcing partners
You cannot run an SCM network all by yourself. Go for trusted partners. MOST businesses outsource some part of their supply chain operation or management. Typically outsourced functions are warehousing and transport. This saves a lot of money. Having a dedicated warehouse and transport fleet is nearly impossible for smaller businesses. So, outsourcing is the simple way.
6. Make the most out of assets
Study how you can maximise productivity with fewer assets. If you think there are underutilised assets in the system, look at letting them go or look at using them further in increasing efficiency and productivity.
