12/10/2022
Supply Chain is a fundamental aspect of any business, it has the means to make or break your business.
Two of the most important competitive differentiators, price & customer service, are governed by the way a business manages its supply chain. By controlling resources, materials and dealing with a multitude of external and internal stakeholders the supply chain function can have significant influence over profitability.
How does the supply chain effect profitability you ask?
- Maintaining Supply; one of the biggest challenges in the current global environment.
- Carrying Excess Inventory; Inventory is money, finding the balance between maintaining supply but keeping inventory turning over without excessively impacting your cash flow.
- Inadequate contracts with your suppliers; when things go wrong, having robust contracts in place to ensure you know where you stand and that you are not paying for your suppliers mistakes. Have you also evaluated your suppliers risks? Do you have all your eggs in one basket or have you reduced the risks in your Supply Chain by having options?
- Quality Control & Preservation; having robust quality controls in place ensure you are accepting quality goods free from defects or that fail to meet the specifications, also ensuring preservation of your inventory until it is used or sold.
- Logistics & Transportation support; ensuring that you have a strategy & contracts in place adequate to suit your organisations demands. You can have the best product on the market, but if you can’t get your products to the end user/customer, it will affect your sales.
- Sourcing; Ensuring you have robust processes and controls in place to make good decisions through your sourcing. Researching the market, finding the most cost effective products and services that are fit for purpose to your organisations requirements.
- System Solutions; are you utilising or embracing system solutions and technology that suits your organisations size and requirements. Investing in technology may reduce your transactional timeframes and lower your costs by streamlining your supply chain.
- Planning and Forecasting; this area can bring all areas of your organisations together. It joins your supply chain to your sales, operations, projects etc. Upfront planning can assist in more effective ex*****on of your Supply Chain when you need it.
