Simplify the management of your supply chain

Cost analysis as a basis

An essential first step in simplifying supply chain management is to carry out a cost analysis. This analysis will identify the main cost items and opportunities for optimisation.

The cost analysis can be carried out by an internal team or by an external consultant. It can cover the entire supply chain or specific elements, such as stock management, logistics or transport.

Good knowledge of processes

Once you have a good understanding of your costs, you need to focus on improving processes. Inefficient processes can lead to extra costs, delays and a poor customer experience.

To improve your processes, you can use diagnostic tools such as flow charts or lean management tools. You can also consult experts or consultants.

Driving within metrics

Using KPIs (Key Performance Indicators) is another effective way of simplifying supply chain management. KPIs allow you to monitor the performance of your supply chain and identify areas for improvement.

The most important KPIs for the supply chain are generally the following:

• Supply chain costs

• Service rate

• Stock turnover time

• Customer satisfaction rate

There's no need to go overboard at a strategic level, but keep the splu simportants. This will save you time and help your teams to understand your priorities.

As for your teams, you need to support them so that they follow your indicators and use their own to achieve yours (the service rate by country, for example, whereas you will be monitoring a global service rate). Leave it to your team to monitor them and take the necessary action.

Transform day by day to improve

Once you have a good understanding of your costs, have improved your processes and are using key KPIs, you can set up specific projects to simplify the management of your supply chain.

Here are a few examples of projects you could undertake:

• Securing a source of supply with several suppliers

• Increase raw material stocks

• Improving takt time with visual tools

• Choosing the right distribution service provider

Increase raw materials inventory

Increasing your raw materials inventory can enable you to respond more quickly to demand and reduce the risk of stock-outs. However, this strategy should be implemented with caution, as it can lead to higher storage costs and increase your working capital requirements. It's a step that requires expertise and experience.

Improve your throughput time

Takt time is the time needed to produce a unit of product to meet demand. Improving takt time can help you reduce production lead times and improve productivity.

Using visual tools, such as dashboards or production flows, can help you improve takt time by enabling you to visualise processes and identify bottlenecks.

Launching a lean manufacturing project can sometimes be complicated. Get a coach to help your manager become an experienced user of the method.

Choosing the right distribution service provider

The choice of distribution service provider is an important decision which can have a significant impact on the performance of your supply chain. The distribution service provider must be able to meet your requirements in terms of cost, lead time and quality of service.

To choose the right distribution provider, you need to compare the offers from different providers and take your specific needs into account.

At this stage, don't forget to look in detail at all the hidden costs (lower quality of service requiring greater customer service, longer delivery times which will have an impact on your WCR and your invoicing cycle, damage not covered, etc.).

Securing a source of supply with several suppliers

Securing a source of supply with several suppliers is an effective strategy for reducing the risk of stock-outs and shortages. By having several suppliers, you can spread your risks and guarantee the availability of your products.

Conclusion

By following these tips, you can simplify your supply chain management and improve your company's performance.