To Optimize Your Supply Chain- Treat Causes – Not Symptoms
Following up on our previous discussions about weakest links that can cause problems, it’s important that you look through the symptoms and find the root cause. While much has been written (including by us) about capacity constraints, you must remember that capacity problems are far more likely a symptom of a problem; rather than being the source of the problem.
Having a deep understanding about your resupply issues is critical to manage logistics in a tight capacity environment. It’s important that everyone involved in the process – both internally and externally – are working on the same page. For example, if your trucking company has see through to your inventory turnover and upcoming needs, they can find ways to more efficiently manage your needs.
For example, you may be utilizing air freight to compensate for a lack of trucking availability; or you may be using custom-critical delivery services because the procurement process has a system that is not optimal. When you and your vendor partners have a full picture of the who, what and why, you can work together to drive improvements.
The number one reason we hear from shippers as to why they don’t want to share this information with their vendors is because they are afraid the information will be used against them in negotiations. While there are certainly vendors that will use such information against you; you can easily develop vendor selection criteria and rewards that would eliminate such behavior.
Today, with so many forces working against you, it’s critical that everyone involved in designing and implementing your supply chain process be working interactively. It’s only when everyone, can see the entire picture that real improvements can be made. And that’s the key to driving a supply chain advantage.