Business success relies heavily on good supply chain management. Mungo Park, president of SAPICS, shares a variety of strategic ways companies can gain the most value from their supply chains.
|Mungo Park, president of SAPICS|
To get the most from their supply chain, companies can start with the following:
There is often misalignment between business strategy and supply chain strategy. If you are following a growth strategy but don’t invest in supply chain improvement, that’s a mistake. Firstly the supply chain strategy must be aligned with the business strategy. Furthermore, the supply chain is the ideal internal business integrator because it touches every other function in the business. So strategically, it can and should play a key role.
If supply chain management is central to your strategy, then the skills to execute it effectively can’t be ignored. With supply chain management skills still lagging in Africa, companies should take advantage of the educational opportunities available in South Africa to create in-company supply chain capability.
The transactional logistics model – buying services based on lowest cost versus lead times and service requirements – may seem best to cost-conscious businesses when dealing with supply chain service providers.
But I strongly advise against it. The partnership model has greater long-term benefits, drives increased value, and promotes continuous improvement because both parties have a vested interest in the success of such a partnership.
With solid partnerships in place, the supply chain can become more interactive. Data can be shared both up and downstream to improve visibility, resource planning and efficiency. The supply chain operations reference model or SCOR model is a good illustration of the extended supply chain – where visibility (and therefore control) reaches beyond the four walls of the business to suppliers and customers.
Real-time data sharing is still not as advanced as it could be. I’ve yet to see improved integration in several industries. Nucleus companies – those with the most touchpoints in the supply chain – can coordinate the sharing of data between parties, usually with the support of a logistics service provider as a partner. However, third party information portals, such as GT Nexus, also offer a convenient means of sharing data and specialise in systems dedicated to providing supply chain visibility.
Companies must focus on excellence in supply chain management and collaborate with customers, vendors and service providers across the extended supply chain to make it work efficiently. In this way, they can ensure the smooth flow of raw materials and finished goods with increased efficiency across their supply chain. This will result in reduced risk and costs, while improving product availability.