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09 November 2021

Tips to improve supply chain management

The supply chain is the backbone of any business, particularly for those engaged in manufacturing and distribution. Hence, at SEIDOR we would like to offer you some tips on how to improve it and maximise its performance: a basic and imperative aspect in order to be competitive in the current climate.

1. Warehouse management

One of the most common mistakes in supply chain management is to disassociate warehousing tasks from the supply chain. However, these tasks have a vital relationship and link to the former. Indeed, it is always essential to find the most efficient means of storing and transporting the goods in our supply chain. It is not only a matter of selecting and optimising one's own warehouse space: it is also a question of selecting the correct method for managing the warehouse.

Currently, and as a consequence of the shortage crisis, it is becoming apparent that any delay or inefficiency in the warehousing of goods can be disastrous for a business. For this reason, it is essential to consider LIFO, FIFO or Just-In-Time planning, depending on the product itself and the characteristics of our demand.

2. Improving supply chain forecasting

Another key issue when it comes to optimising the supply chain is foresight and anticipation. It is crucial to make the most accurate predictions possible and, at the same time, to prevent as much as possible that which depends on external factors. In particular, everything related to suppliers, who will have the biggest impact on the operation of the supply chain (after our own management, of course). Therefore, regular reports should be issued and carefully considered: it is also necessary to set targets and manage supply in real time. This can be achieved through ERP: particularly through one as efficient as SAP Business One.

3. Inventory management

A third aspect for improving the supply chain (although related to the previous point) is inventory management. This is probably one of the most essential parts of supply chain efficiency. It is crucial to measure and optimise the relationship between demand and supply and to ensure that it is always well-balanced. This means securing the flow of goods and their availability, as well as being able to maintain the potential and needs of customers' own demand. It is therefore essential to have a good conceptualisation of the inventory, its nature, its stock and its condition. This will prevent losses and, above all, reduce costs.

4. Expand the visible horizon

Often the mistake is made of thinking that each of the preceding tips applies to each part of a business separately. However, this is not the case: the supply chain is precisely a chain because each element involved is connected to the others. It is a transversal concept that embraces all departments. It is therefore essential to increase the visibility horizon of the supply chain. In other words: it is necessary to control each of its component parts and try to have a holistic view of the entire system. Again, this can be done using specific tools.

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5. Monitor the role of transport in the supply chain

Again, and precisely because it is a cohesive element, the supply chain must pay close attention to the role of transport. It is also essential to keep track of all the routes and shipments. Indeed, such control does not only involve dealing with all their management costs: beyond that, the aim is to reduce as much as possible the associated costs. To achieve this, a good option is to directly contract a transport service according to the characteristics that our own service must comply with.

6. Outsource warehousing to professionals

In exactly the same way as with transport, with regard to logistics or warehousing it can be a good alternative to hire professionals to handle this. Their task will be to organise an efficient plan and implement it as effectively as possible. By doing so, we will be generating significant cost savings in the medium and long term and, at the same time, we will be able to rely on external professionals without having to venture out in search of them.

In the process, we will benefit from all their infrastructure and resources, which could be too costly if we were to do it ourselves. Naturally, such a company should ideally function cohesively with the supply chain of our business.

7. Segmentation, one of the key concepts in the supply chain

Segmentation is the tool that can help us to always be more precise. Indeed, we could define segmentation as the most effective way of adjusting and fine-tuning each of the parts. Up to now, we have talked about segmentation in the supply chain itself; however, we can never overlook segmentation in the very market we are focused on. In short, it is about understanding the needs and preferences of the customer.

This is achieved by analysing the market, timelines and all the information associated with business demand. It should be emphasised that this point will in fact help us to naturalise more efficient management within our own business and supply chain, since the demands of our customers will mirror our own targets.

8. Implement current technology

ERP or MRP are just two examples of the technologies currently available to improve supply chain management. Failure to implement them in a business is a mistake: indeed, it is no longer an option, but rather is becoming a definitive criterion in determining the survival of a business. This is why at SEIDOR we offer real solutions for present-day businesses.

We invite you to try our solutions and convince yourself of what they can do for you.

Shall we talk?

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