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Our Fate Lies In The Supply Chain Operations

Posted: September 01, 2009 by Ly Phan

Our Fate Lies In The Supply Chain Operations

Discussions about the supply chain operations outside our industry don’t often interest many people, but the reality is they are the backbone to a company’s survival. When you consider cash flow and capital, most of their assets are tied into their supply chain, and it’s a wonder so many don’t pay more attention to it. For the past 12 months, companies have seen customer demand fall, while demanding customers rise. Many have taken to a hack-and-slash approach to cutting volume and resources during the economic downturn, and the frightening thing is that the recovery could be just as jarring. Considering all the cuts, there are bound to be shortages in production and distribution which brings up inflation fears.

 

An article from LCP Consulting highlights several pillars for success which all have a common bond: collaboration. Whether it’s being agile or providing excellence in customer service, all of this relies on having accurate internal and external information through collaboration with customers and partners alike.

 

Reduce unprofitable complexity by truly understanding how both customers and products erode margin

50% of the profit potential was lost due to customers and products erode margin. Thus, it is important to find out which activities are causing such erosion and eliminate them.

 

Build customer service excellence into your supply chain

The higher your customer service level is, the longer the customer will choose to stay with you. It is crucial for a business to maintain an excellent customer service level in both the short and long term. 

 

Become the preferred customer of your key suppliers

To survive in the market, businesses will need a long term relationship with their key suppliers. The benefits gained are tremendous compared to what you have to give back, especially when time gets tough. 

 

Design, plan and execute for agility

In this day and age, customer demand will only keep rising. Thus, it is important for businesses to be able to respond quickly. By proving a fast and accurate delivery, businesses can enhance their customer service while reducing their inventory stock-outs.  

 

Synchronize and integrate to eliminate waste and cost

With an appropriate practice of waste elimination, Toyota has become one of the world’s leading manufacturers. Another example is TESCO, well known for its lean warehouse operations. It is clear that eliminating waste and cost plays a crucial part in any successful business.

In the end, the catch is that you have to prepare now.

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