Nobody wants to face the fact that their business may be in decline. With the explosion of new technologies and services disrupting business — especially around the supply chain — organizations that don’t adapt will inevitably stagnate, but that doesn’t have to mean the end. By taking the right steps toward transformation, business leaders can mobilize their companies back to the top using supply chain services and strategies that reduce costs, increase profits and create sustainable processes that propel businesses into the future.
Here are three steps for transforming your supply chain into a powerful profit engine:
Step 1: Let Go of Past Supply Chain Inefficiencies
As technology disruptions fundamentally change business practices and consumer demands, existing strategies break down, leading to inefficiency, increased costs and, ultimately, stagnation or decline.
The core of supply chain management in any business has always been the workforce behind the process. But in today’s fast-moving, always-on economy, your staff is most likely struggling to keep up. Outdated processes that rely on complex handoffs, burdensome paper processing and human-led analysis of the supply chain result in both higher costs and risk. Long lead times and processing delays prevent businesses from getting their product to market — either through distributors or direct sales.
Transformation means committing to letting go of what no longer works, enabling your staff through new technologies and empowering them to adopt new strategies that deliver products to market faster, with greater accuracy at a lower cost.
Step 2: Harness the Power of Your Supply Chain DataTransformation solves big challenges around supply chain management. Specifically, data-driven, predictive analysis can help you improve cost control, eliminate lead-time delays, reduce processing complexity and significantly improve dealer service levels and the overall customer experience.
But first, you have to understand your current inefficiencies. That means a detailed analysis of your data, identifying gaps and implementing processes to harvest, analyze and use your data to continually improve operations.
Data analysis can help you identify sources of complexity and inefficiency in your supply chain management. Companies that leverage data analysis have been able to:
- Cut lead times by stocking inventory closer to demand
- Reduce costs related to product planning and order management by relying on evidence-based predictive analysis
- Streamline credit, invoicing and collections for fulfillment customers
- Establish key performance indicators to continually measure progress and refine processes
Step 3: Partner With Supply Chain Services Where It Makes Sense
With the right team in place, you can greatly increase your potential for transformation success. By partnering with modern supply chain management service experts, you’ll identify areas of improvement faster and more effectively, and you can also offload day-to-day activities and repetitive tasks — either on new technology processes or on a flexible workforce — so that your staff can focus on building your business and delivering value to your customers.
Supply Chain Management Transformation in Action
In our case study, Smart Product Innovations Increasing Supply Chain Time and Cost Burdens, you’ll see how Tech Data Global Lifecycle Management (GLM) helped one manufacturing company reduce costs, improve order cycle lead time, reduce complexity and greatly improve the dealer experience, including:
- Improving order-to-delivery note cycle time by 45 percent, realized on day zero
- Reducing the time required to deliver 99.5 percent of all shipments by two days
- Optimizing and improving cash flow and order management, with better order tracking and ETA visibility
- Achieving faster-turning inventory, and positioning the company for exponential profitability and growth
Additionally, the company was able to redirect several hundred dealers to GLM for day-to-day operations and contact, allowing the company to focus on marketing, selling and strategic development.
About the Author
Chris Wright serves as the director of program and project management within Global Lifecycle Management, a specialized solutions business of Tech Data.