Much has been said about supply chain management. But what about supply chain alignment? Have you aligned procurement, production, transportation, and distribution to work in a coordinated and integrated manner? This blog will address three key points related to supply chain alignment, including whether your assets are aligned for optimal performance, logistics services, and goals.
Are Your Assets Aligned for Optimal Performance?
Most organizations, with the exception of pure e-commerce and start-ups, operate a supply chain with a portfolio of assets comprised of that are the result of legacy decisions. Warehouses, distribution centers, transportation infrastructure, and intangible assets, such as technology and human resources, may be well managed, but are they well aligned?
For example, a distribution center may be ideally located for a single inventory strategy, but this location demands a much higher transportation cost for final-mile distribution. Better alignment might be moving to a decentralized distribution network with products closer to your market.
Another factor to consider is whether your assets are scalable to meet changing market conditions. Your warehouses, distribution centers, and transportation infrastructure should be able to adapt to fluctuations in demand and supply chain disruptions.
Finally, consider whether your technology and human resources are aligned to support your supply chain operations. The ROI of having the right system to manage your inventory, order processing, and transportation logistics will be rewarding, especially with the right people at the controls.
Are Your Logistics Services Aligned?
A well-aligned supply chain ensures that a business can meet customer demands efficiently and cost-effectively while minimizing waste, reducing delays, and optimizing the use of resources. It requires a holistic approach considering the entire supply chain, from raw material sourcing to final delivery to the end customer.
Effective supply chain alignment requires a deep understanding of the business’s operations, customer needs, and market dynamics. It involves continuous monitoring and assessing your supply chain to identify gaps, costly redundancies, or misaligned schedules. Supply chain engineers, such as those at WavePoint 3PL, are skilled at evaluating supply chains from the perspective of alignment:
- Process Optimization: Supply chain engineers can analyze the existing supply chain processes and identify areas of inefficiency or misalignment. They can recommend process improvements and reengineering efforts to optimize supply chain operations and improve alignment across functions.
- Technology Implementation: Supply chain engineering can help companies adopt technology solutions such as visibility platforms, digital supply chain networks, and automation tools to improve supply chain coordination and alignment.
- Supply Chain Network Design: Supply chain engineering can help companies design and optimize their networks to improve alignment across the supply chain. This includes evaluating the number and location of warehouses, determining the optimal inventory levels, and optimizing transportation routes.
- Performance Measurement: Supply chain engineering can help companies develop performance metrics and key performance indicators (KPIs) that align with the company’s overall strategic objectives. Use these KPIs to measure and monitor supply chain performance and identify areas needing alignment.
One key factor is whether your providers have the right capabilities to meet your needs. Your transportation providers should have the right equipment and resources for both inbound and outbound. Your 3PL partners should also have the right expertise and systems to manage your inventory and distribution operations effectively.
Are Your Goals Aligned?
Logistics managers serve many masters: production needs supply, finance needs bottom-line efficiency, and customers need fulfillment. Does your supply chain deliver value to all these stakeholders? Your supply chain operations should be designed to meet the needs of your target market and deliver a positive customer experience. Your supply chain strategy should be aligned with your overall business strategy and objectives.
When all parties involved in the supply chain are working towards a common goal and have a shared understanding of their roles and responsibilities, it becomes easier to coordinate and optimize the various activities involved in the supply chain. As a result, you’ll improve efficiency, reduce costs, and increase customer satisfaction.
A study by Deloitte found that companies with highly aligned supply chains are 18% more likely to see revenue growth than those with less aligned supply chains. According to a survey conducted by EY, 61% of companies say that supply chain alignment is a top priority for their organization. However, only 16% of companies are fully aligned across their supply chain functions.
Supply chain alignment is critical for companies that want to remain competitive in today’s market. To ensure optimal performance, companies need to consider whether their assets, services, and goals are aligned for optimal performance with all stakeholders. By focusing on these key areas, you can optimize your supply chain operations and deliver value to your customers while improving your bottom line.