Every inefficiency in your company's operation creates further inefficiencies in your supply chain. Ineffective manufacturing and warehousing processes lead to delays in shipping and receiving, costing your business money and impacting customer satisfaction. To build a more efficient supply chain, start by developing a more efficient workforce.
To make your supply chain leaner, cheaper, and — ultimately — faster, consider these tips.
1. Document Everything
Optimizing any process begins with understanding its nuances, and supply chain optimization is no different. Start with routine processes on the manufacturing line and in the warehouse pick-and-pack system. Determine how long each process takes, how many employees are involved, and what the ultimate cost is for each -- not just in terms of employee compensation, but the costs of potential delays in shipping and delivery. In a 2009 article, Theresa Skrapits, production director of MediZine (now Remedy Health Media) noted: ""Keep track of what worked [and] what didn't," ... In five years, I've 'found' over $1 million worth of savings simply by doing things better!"
2. Utilize Employees with Versatile Skill Sets
No matter what industry you're in, it's likely that many processes related to your supply chain don't require a dedicated full-time employee. A thorough documentation process will allow you to discover these inefficiencies, and then merge or eliminate non-optimized roles. This doesn't mean you're losing oversight of these critical processes -- it just means hiring or developing employees with the skills to manage multiple processes across your organization. This will save you time and money. And since these processes will no longer be managed by a single employee, illness or other personnel absences no longer represent a "single point of failure" that can echo throughout your entire supply chain.
3. Outsource Non-Essential Tasks and Processes
If it doesn't add value, do you need to keep it in-house? Most often, the answer is "no." As Industry Week's Ravi Sankar pointed out, processes like "determining the optimal distribution network [and] the payment and audit of freight bills" are often best performed by specialized contractors. "Most often," Sankar wrote, "by relying upon a specialized third-party provider, a better value will be realized in the long term. Focusing on your organizations core competencies will help you grow your business."
4. Invest in New Technology
Keeping your workforce plugged in to each other, as well as in to your overall supply chain, is a great way to streamline your logistics operation. Plus, manufacturing and logistics software is more powerful than ever before, enabling your business to eliminate manual processes and make your workforce leaner and more efficient. From a recent Manufacturing Business Technology article:
"BEGA-US, a privately-held architectural lighting firm that supplies lighting products...sought a solution that would reduce processing and development time across the sales, engineering and manufacturing departments – a critical quality in an industry where sale-to-delivery timeliness can define a company’s reputation.
Since the implementation BEGA has seen a significant improvement in their operating efficiency and data management is streamlined in an integrated accessible solution. BEGA also saw key improvements in the process flow as well as reductions in order-to-shipment times."
Mobile technology can also provide huge gains in efficiency. When your staff can communicate easily, breakdowns in processes are less likely to occur – and when they do happen, they can be addressed quickly. Consider extending your mobile communication network by putting your internal staff in contact with drivers and even sales staff. This can help you and your employees improve your workflows and plan your inventory more accurately.
5. Manage for Efficiency
As legendary management consultant Peter Drucker once said, “What gets measured gets managed.” To track your staff’s performance, establish clear KPIs and evaluate them regularly. Metrics like Shipping and Receiving Turn Times, Perfect Order Rate, Actual Production Time, and Order Picking Accuracy are critical for understanding your supply chain’s performance. Make sure your staff understands what these metrics mean, how they’re evaluated, and why they matter. Sharing these metrics with your team on a regular basis will help them understand their performance and identify ways to improve. SimpleKPI.com provides a thorough list of common KPIs for manufacturing.
Ultimately, building a more effective supply chain starts with you. As a decision maker in your business, it’s up to you to seek out and implement strategies that reduce inefficiencies and enable your staff to perform at the next level. With the right tools, an open communication strategy, and an engaged management team, you can guide your workforce toward a model that saves your business time and money. Your customers will be glad you did.