Effective supply chain design involves proactive thinking and constant improvement. Computer-based operations can help pinpoint problem areas. Timing is crucial in receiving raw materials, while efficiency is key in manufacturing. Productivity is linked to worker happiness. Understanding the end customer is important for marketing and packaging decisions. Shipping and packaging practices should be optimized for cost and protection.
Supply chain design usually boils down to three areas; receive raw materials, manufacture a product and transport it. Each of these steps has several basic points that will improve a supply chain, regardless of the product being produced. The biggest factor in an effective supply chain is proactive thinking. A company should never believe that the system currently used is the best; There is always room for improvement. By constantly looking at current supply chain design, it is possible to make small improvements that add up to big savings.
One of the biggest improvements in modern supply chain design is computer-based operations. There are several different supply chain programs that will help companies in creating, maintaining and improving all aspects of the process. These programs often help a company find ways to improve or pinpoint problem areas that would have gone unnoticed without them.
At the raw materials stage, effective supply chain design is based on timing. It is very rare for a company to want to stockpile raw materials that it is not using. In fact, most companies want as little surplus material as possible. Materials waiting to be processed can be damaged or destroyed, causing loss to the company. In most cases, the supply shipment timing should be configured to receive more raw materials before the current stock is depleted.
The manufacturing stage is very different based on the systems used and the goods produced. In general, this stage is about efficiency. Keeping workers operating at peak productivity will improve production for the next stage of the supply chain.
Keeping people productive isn’t always as simple as it sounds. The biggest productivity factor is happiness. Often, if a worker feels they have a personal interest in their work, beyond just continuing to take it, their productivity improves. Whether this involves incentives such as raises or personal involvement from your supervisors varies by worker and industry.
The final step in supply chain design is the most out of the company’s control. When selling a product to the next stage in the supply chain, it is important to understand who the product is sold to. If the seller is a reseller, the company should look at how the product is displayed in the store. This can lead to packaging or marketing improvements. If the product is for other manufacturers, they may also have suggestions.
Additionally, companies should not discount shipping or packaging practices. Low cost shipments are not always the best option. Getting goods to a location when and how they are supposed to get there is usually the best choice. When packaging a product, companies should keep packaging to a minimum to reduce costs and ensure that it protects the good from unintentional damage. In some cases, making a product more durable will result in happier customers and lower costs.
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