The 5 Elements of Good Supply Chain Management

Today’s businesses work in a complex and often challenging marketplace. Increasingly, even a small business owner must look for ways to improve their bottom line through better management of costs and quality. One key way to do this is through supply chain management. To help you better utilize supply chain management, discover the five key elements of good management. 

1. Planning

Planning ahead for business factors and changes is vital for any size of business. You must be able to scale up or down operations to meet demand by understanding your seasonal cycles, market trends, supplier trends, and even world conditions.

Planning is the first step in coordinating a better overall supply chain system because it helps you be proactive instead of just reactive. A brewer, for instance, might analyze differences in consumer behavior between summer and winter seasons, look at agricultural trends in hops production, and even stay on top of interstate transportation rules regarding food and beverages.

2. Sourcing

The first physical stage of any supply chain is finding the raw materials and services you need to produce whatever you produce. Without stable sources, you cannot keep operations going. 

Unfortunately, many small companies leave this step up to their immediate suppliers. But the suppliers you buy from are actually a later link in a long chain that begins much earlier. By being concerned with not only the quality and reliability of those who provide materials to you but also those they rely on for goods, you ensure a more stable system. 

3. Manufacturing

Once goods get to you and your immediate suppliers, your company must use them to produce things you can sell. The manufacturing process is often largely in-house, so this can be an area where you have a lot of control.

Most companies should be in a state of constant refinement, including checking for quality, improving packaging, making more with less, speeding up timelines, and reducing waste. This mindset, especially when made a company priority, helps everyone take ownership in improving their part of your overall manufacturing system.

4. Delivering

The transportation element of logistics planning is often a great place to start improving your overall supply chain. This part of logistics is among the oldest elements and one where you have built-in help from transportation logistics companies. These will help you maximize load size, avoid customs delays, track shipments, determine the best routes, create backup plans, and right-size your carrier network. 

With more companies involved in global sourcing and sales, transportation is a bigger factor than ever. Your goods are now affected by port delays, weather across the continent, and airline strikes in foreign countries. This makes it critical to create a resilient and flexible transportation network. 

5. Returning

Last but not least, how is your process for returning unused, damaged, or unsatisfactory goods? Whether from your company or from your customers, prompt and smooth returns are important to minimize all customers’ negative experiences.

The return process is also a great place to assess weak spots in your chain. Any item a customer returns as unsatisfactory or unusable in your own manufacturing process offers a window into something that failed in your supply chain. By finding out what it is and fixing this issue, you strengthen your chain. 

Could your business benefit from help in any — or all — of these five areas? Then better supply chain management could be an excellent investment for its future. Begin by meeting with the logistics pros at AIT Logistics. We provide an array of services to help you collect information about your supply chain, analyze its effectiveness, and find better solutions. Call today to get started.

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