Create effective supply chain?

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Effective supply chains reduce costs while maintaining quality and service. Market intelligence and technology help maximize efficiency, while quality management systems (QMS) provide a framework for continuous process improvement. QMS examples include ISO 9001, Six Sigma, and LEAN.

The supply chain is responsible for two things: cutting costs and maintaining a legal organization. As such, an effective supply chain boils down to reducing costs while maintaining service and quality. One way that effective supply chain organizations increase and maximize supply chain efficiency is through technology and market intelligence. Both allow managers to create a more agile and effective supply chain.

Market intelligence, for supply chain managers, is more than finding the best shipping routes and practices. It’s about leveraging industry resources and relationships to find the lowest-cost solution that can be customized to fit a specific business model. Using internal relationships to compare also ensures more relevant and accurate data than pulling data from general industry reports.

A more practical use of market intelligence is getting information about 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 create an effective supply chain must figure out how best to handle increased demand for current product offerings and new demand for new product launches. Both require a good relationship with the supplier. These relationships allow suppliers to understand and meet customer demand effectively.

In addition to reducing costs, the supply chain must also maintain quality and service. Failure to do so could have negative implications, both from a net income and legal perspective. One solution supply chain managers are using is the quality management system (QMS).

A QMS allows an organization to focus on quality one process at a time. It also provides a common language between different functional areas of an organization that may share the same process. A good QMS helps connect and align company goals with supply chain performance. Examples of QMSs are ISO 9001, Six Sigma and LEAN.

QMS 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 end-to-end and then studied to uncover bottlenecks and redundant steps. The goal is to reduce errors by focusing on ways to make every process in the organization more efficient. A team of employees can recommend changes and implement the changes once approved. Most QMS aim for a more effective supply chain through continuous process improvement.

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