5 Key Principles Optimizing Supply Chain Planning for your Business

Posted by Geekplus on Mar 25, 2021 3:41:41 PM

Supply chain planning is the process of planning a product from raw material to the consumer. It coordinates assets to optimize the end-to-end delivery of goods, services and information from the supplier to customer, balancing supply and demand to achieve the financial and service objectives of the business.

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When a business lacks ample supply chain planning, their operations will suffer from a lack of proper foresight and coverage for the potential "what-ifs" that are capable of occurring, hence exposing the business to demand and supply volatility. In addition, businesses today can no longer afford to move forward with slow, siloed planning. Managers need to collaborate closely with both internal departments and external partners or vendors, and rapidly share information in order to communicate and align actions to optimize outcomes.

In this article, we share 5 key principles that businesses should consider when they embark on supply chain planning.

1. Achieving real time visibility across all points of the supply chain

Supply chain planning involves a myriad of stakeholders, including suppliers, customers, channels, distributors, vendors and internal departments. In a recent Oxford Economics survey which interviewed 1,000 supply chain executives, three-quarters of respondents recognize the importance of visibility into the sustainability practices of their organization and suppliers, yet few have full visibility into either.

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With the right data and tools such as an supply chain analytics solutions, businesses can utilize real-time data from all points of the supply chain allows you to plan with more accuracy and certainty. The pandemic of 2020 has shown how quickly global and business landscapes can change, and it is the businesses which can most clearly grasp the visibility of their supply chain that will have the fastest reaction times to a crisis.

2. Integrating demand and supply planning

COVID-19 is an example of how twin impacts to the supply chain can occur at once and cause a complex disruption to the supply chain. In 2020, the pandemic severely impacted global economic activity and led to both supply and demand shocks to the global supply chain, as manufacturing facilities shut down and global consumer spending reduced drastically.

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This has driven home the point that business need to focus equally on processes that involve both the clients and suppliers. When demand and supply planning is integrated, fluctuations in demand plans can show real-time downstream impacts on supply plans, enabling managers to respond effectively.

As such, businesses require an end-to-end solution that allows for a unified strategy to address trends, rapidly shifting consumer tastes, and volatile demand/supply signals. By considering both supply and demand, trade-offs are more visible - powering better decision making with a holistic view of the business’s momentum.

3. Adopting relevant automation solutions

Emerging technologies like blockchain, artificial intelligence, machine learning and robotics are generating massive amounts of attention in the supply chain industry. When these technologies are harnessed effectively, they can bring huge benefits to your business’s supply chain.

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For example, Autonomous Mobile Robots (AMRs), can provide highly efficient and reliable operations while supporting businesses to flexibly respond to fluctuating demand and adjust production capacity.

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Warehouse digitalization opens the window to AI algorithms and a host of applications from automating processes to tracking real-time location of SKUs. By automating and accelerating warehouse processes, accuracy is also enhanced and workers are enabled to carry out routine operations faster than ever.

4. Pursuing a collaborative strategy for both key customers and suppliers

The most successful businesses often have superior communication with its network of vendors, distributors and employees. When business prioritize transparency and collaboration in their supply chain planning, they will have quicker access to accurate forecasts, reports, quotes, statuses and many other plans which are pivotal to the supply chain. A collaborative strategy is also effective in winning supplier and distributor buy-in, allowing businesses to sustain strong relationships with its partners.未命名設計 (3)

5. Applying lean principles and continuous improvement

Establishing a logical, connected supply chain plan is just the first step in the process. Businesses should continuously work to streamline processes, improve supplier relationships and meet customer needs. They should constantly learn from their data and experiment with data relationships and correlations.

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For example, conceptual tools like Just in Time (JIT) ensures all efforts are directed at providing only the goods and services required by customers, both when they want it and in the exact quantity they desire. Another conceptual tool, Kaizen (continuous improvement), is an ongoing process of looking for improvements in every area of the process. This philosophy can be embraced at all levels of the business and applied to any task. Finding ways to do things more efficiently, accurately, and effectively minimizes waste and adds value to supply chain planning.

These are just five principles which businesses can adopt as they embark on the planning process of their supply chain. With effective supply chain planning, business can become better prepared for unforeseen obstacles and circumstances in their supply chains and elevate their overall competitive advantage in the industry.

Topics: Automation, Supply Chain, Planning, Lean