16 Ways to Optimize Supply Chain Performance

Hrvoje Š.
6 Min Read

An agile and resilient supply chain answers what you need to give your supply chain its best chance of success. With risks present and supply chain disruptions inevitable, rising costs and ever-changing logistics factors, there are many moving components to a supply chain.

To remain competitive, businesses must find ways to optimize supply chain performance. Yet many companies need help with this. Here is where to start.

Don’t Be Complacent

Be vigilant. Look for ways to improve supply chain efficiency. Monitor your supply chain’s performance daily to ensure it meets your expectations.

Train Your Workers

Every warehouse associate, order filler, or logistics manager should be thoroughly trained on standard operating procedures. Any change you implement should be implemented across the board. Have a training plan for new employees.

Real-Time Tracking

Implementing connected smart technology enables real-time asset tracking through your supply chain. This creates all sorts of data to optimize your logistics processes—track metrics such as fulfillment time, profit margins, shipping speeds, lead times, and more.

Third Party Logistics Provider

For small companies, optimizing supply chain performance can be a challenge. It can also be difficult if you’re an established eCommerce brand. The best moves many companies take is to set up a third party logistics provider to optimize what they do and take responsibility for you over time.

Automate Inventory

Inventory software automates certain aspects of inventory management, such as tracking inventory levels and predicting or managing stockouts, backorders, and carrying costs.

Lean Into AI Automation

Automate aspects of your supply chain and see improved efficiency, reduced human error, increased velocity, and savings in time and money. From order processing to shipping, human labour is still needed, but you can streamline your operations through automation.

Evaluate New Technology

Evaluate and invest in new technologies where appropriate. Although costly, automation, equipment, and robotics can greatly improve your supply chain performance.

React Quickly to Sudden Changes

Occasionally, sudden changes will affect your supply chain processes, and you will be tasked with reacting quickly. You may need to scale up and down, get inventory shipped quicker, or move.

Maintain Strong Supplier Relationships

Have good relationships with all of your suppliers. This way, you can easily manage shortages, delays, and other issues. Remove any suppliers who deliver inconsistent quality products.

Weed out any stakeholders actively causing issues and delays. Reward any supplier who proves themselves to be responsible and flexible. Continue to put in your time to maintain these relationships.

Monitor Customer Demand

Customer demand will rise and fall throughout the year, depending on the season and various factors. Meeting customer demand and accurately predicting these variances will indicate how to continue delivering your products on time and at the expected cost.

Reduce Risks with the Right Partners

Supply chains are always at risk of failure. Reduce this risk by diversifying your resources, planning, and establishing partnerships with the right stakeholders. It is important to discount the value of a toy when you find a supplier, fulfillment center, provider, or shipping carrier that always takes care of the toy.

Eliminate Flawed Forecasting

You may have switched to a cheaper method to save costs, only to suffer from efficiency. Always weigh the value of the expense against the importance of having an efficient supply chain.

Flawed forecasting will negatively impact your business, from delaying deliveries to inventory levels never in sync with demand. Wherever the issue is in your forecasting, if it’s inefficient or false, get rid of it.

Optimize Every Shipping Aspect

Find optimized routes—open strategic fulfillment locations to cut shipping time. Improve the picking and packing processes. Negotiate better shipping rates if you have the volume to support sitting down with a shipper to discuss the possibility.

Use Supply Chain Software

There is no reason not to use supply chain software. It will tell you what’s happening with every order and every fulfillment center where your inventory is stored.

Monitor Returns

Returns will happen. Track damaged inventory to ensure it is returned to the supplier. Ensure returns are handled promptly, cost-effectively, and as easily as possible, as you resolve the error with customer satisfaction in mind.

Prioritize Eco-Friendly Initiatives

Reduce your carbon footprint with environmentally sustainable initiatives, such as switching to eco-friendly packaging. Cut back on unnecessary filler material in your packaging. Consider allowing customers to choose carbon offsets per order to offset the carbon impact of product manufacturing and delivery.

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