The benefits of improving your supply chain understanding

There is no doubt that a keen understanding of supply chain design and processes is very important to those taking responsibility for their organisation’s supply and demand processes, but, in reality, do those in finance, procurement and sales have a firm enough grasp of it?

Though they may not be aware of it, those not directly involved could be a key part of their organisation’s supply chain success. When access to the supply chain is restricted to those working directly on it, the effectiveness of the wider business is hampered leading to a downturn in operational efficiency and profitability.

Imagine how much more effectively the business could operate if everyone was granted access to supply chain data relevant to their own individual responsibilities. This is entirely plausible with the right choice of supply chain software.

Aim for a greater view

From procurement teams to finance specialists and sales personnel, there are countless departments and individuals who, given a greater view of the supply chain and its workings and how these impact on their departments and individual responsibilities can be optimised to facilitate greater levels of efficiency.

Finance controllers, for example, could benefit from gaining a familiarity with the suppliers that require quicker payments to release goods that your business might urgently require. Manufacturers would benefit by quickly receiving out of stock components that are delaying production while retailers could satisfy customer demand with shorter lead times.

Procurement teams could benefit from access to data that enables greater demand planning based on end-consumer demand dictating stock production, ordering and replenishment schedules. Through software-enabled collaboration with those involved with supply chain logistics, procurement teams can ensure all inventory buffers are removed between suppliers and end-consumers, reducing the likelihood of long lead times, or excess stock requiring costly storage until there is a demand for it.

Procurement teams could also benefit from greater access to the supply chain by meeting purchase deadlines for perishable goods. By being given a greater view of the supply chain, they can move perishables through the supply chain before they are past their best, ensuring the business can sell the produce at maximum value instead of discarding spoilt stock, which would likely happen at a cost.

Without access to the relevant data, the best performing sales teams can in fact have a negative impact on supply chain operations. With a lack of information on supplier lead times, sales personnel can cause backlogs and bottlenecks, pushing sales for items that are already in demand while forgotten stock that they could be selling instead continues to sit in a dusty warehouse at a cost to the business.

Forecast better to counter business disruption

Business disruption is inevitable whether it comes as a result of a financial crisis, natural disasters or political upheavals. In 2016, the BCI Supply Chain Resilience Report found that one in every three organisations reported losses of £750,000 or more that year. The report revealed that the biggest impacts on organisations came from loss of productivity, cost of working and damage to brand. If the events of 2017 were anything to go by, the year ahead could see varying levels of disruption in global, political and natural forms impacting productivity, cost and brand even further.

There is hope, however. By providing senior management with a clearer view of it, they can keep their businesses safe from disruption and ensure healthy profits. Provided with a global view of the supply chain, they can identify areas where greater efficiency and other cost saving measures can be applied. If that view is supplied through software that features supply chain modelling capabilities, they can also plan and model the supply chain for disruptive scenarios.

This is all easily achievable with access to relevant data, as well as the ability to collaborate easily with supply chain executives and other internal stakeholders invested in the supply chain.

From the C-suite down, and across various departments, a greater synergy can be found within the business and between the business and its supply chain partners. The supply chain has become an essential resource for the experts in every department, and with the right supply chain software, businesses will flourish in the face of disruption.

Will Lovatt is vice president EMEA at LLamasoft

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