How do we more effectively drive innovation through our supply chain?

 

Today’s customers expect more. Customers want to order a product/service they want, receive the product/service when they want it, and they want to purchase it at a reasonable price. Customers don’t care how their wants impact your organization. If you don’t provide what they want, they’ll simply go elsewhere. This is a tough spot for organizations because they are often dealing with increasing costs for raw materials as well as figuring out how to reduce production/service times and reduce/eliminate waste and scrap.

Here’s some good news. Effectively driving innovation through your supply chain provides your organization with a distinct advantage. It allows you to provide your customers with the product/service they want, in the timeline they expect, and at an effective cost. Every organization is different, but an effective Supply Chain Management strategy can be critical to an organization’s success. Some important areas to review are vendor partnerships, cross docking and distribution management, technology, and integration.

Creating vendor partnerships allows organizations to work with a smaller number of vendors. Usually this is a contracted relationship. The organization agrees to purchase a specific amount of product/service from the vendor and the vendor reciprocates by implementing continuous improvement solutions in order to provide the best quality product/service at an appropriate cost to the organization.

Cross docking allows organizations to receive product and immediately ship product to another location. This significantly reduces costs because the organization is no longer storing inventory, therefore decreasing warehouse costs.

Distribution management is the system an organization uses to manage its entire distribution network from packaging, inventory, warehousing, supply chain, and logistics.

Determine how you will use technology in order to manage your supply chain. Smaller organizations can create relatively simple systems, while larger organizations may need to purchase a more sophisticated system. Integration focuses how you are going to manage your supply chain with vendors and various departments within your organization.

So, if you want to effectively drive innovation through your supply chain …

  • What vendor partnerships will you create? With whom?
  • Will cross docking work in your organization? How do you know?
  • Does distribution management make sense for your organization?
  • How will you use technology to manage your supply chain?
  • How will you integrate?

Innovation is a strategy and a process that is never ending. Organizations who embrace innovation will charge forward to success and profitability.

 

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