Effective supply chains focus on cost reduction while maintaining quality and service. Market intelligence and technology can increase efficiency, while a quality management system (QMS) can help align business goals with supply chain performance. QMSs map out processes to reduce errors and improve efficiency through continuous improvement.
The supply chain is responsible for two things: reducing costs and keeping an organization legal. As such, an effective supply chain boils down to cost reduction while maintaining service and quality. One way effective supply chain organizations increase and maximize supply chain efficiency is through technology and market intelligence. Both enable managers to create a more agile and effective supply chain.
Market intelligence is more to supply chain managers than finding the best shipping routes and practices. It’s about leveraging industry resources and relationships to find the most cost-effective solution that can be tailored to fit a particular business model. Using internal benchmarking reports also ensures more relevant and accurate data than obtaining data from generalized industry reports.
A more practical use of market intelligence is obtaining insight into consumer demand. Higher demand increases the amount of inventory an organization needs. Being able to accurately forecast this demand can help the supply chain design contracts and supplier relationships to meet this demand.
Companies looking to build an effective supply chain must find the best way to handle both the increased demand for the current product offering and the new demand for new product introductions. Both require a good relationship with the seller. These relationships enable suppliers to understand and effectively meet customer demand.
In addition to reducing costs, the supply chain must also maintain quality and service. Failure to do so may have negative implications both from a net income point of view and from a legal point of view. One solution used by supply chain managers is the quality management system (QMS).
A QMS allows an organization to focus on the quality of one process at a time. It also provides a common language between different functional areas in an organization that can share the same process. A good QMS helps connect and align business goals with supply chain performance. Examples of QMS are ISO 9001, Six Sigma and LEAN.
QMSs work by providing supply chain managers with a framework to map out a process to create a more effective supply chain. The process is mapped from end to end and then investigated to uncover bottlenecks and redundant steps. The goal is to reduce errors by focusing on ways to make each process in the organization more efficient. A team of employees can then recommend changes and implement them once approved. Most QMSs look for a more effective supply chain through continuous process improvement.
Protect your devices with Threat Protection by NordVPN
