The supply chain is the backbone of any product-producing business. We’ve rounded up our top tips for strengthening your supply chain in 2019:
1. Know your suppliers
The first step of strengthening your supply chain is knowing who’s in it. The problem with globally dispersed, trust-based supply chains is the lack of reliable data. For example, quality issues often go undetected until reaching the warehouses or stores, and lack of data means it can be hard to identify where the issue occurs; making it near impossible to control and deal with. In order to have a strong supply chain, it is essential to know who your suppliers are, all the way down the supply chain.
Australian surf wear brand Rip Curl felt the repercussions of ineffective supplier tracking in 2016 when their products were found to be being produced by workers enduring slave-like conditions. After being produced in a North Korean factory, the goods were shipped to stores worldwide with a “Made in China” label attached. Tony Roberts, previously Rip Curl’s Chief Financial Officer, stated that the company “only became aware of it after the production was complete and had been shipped to our retail customers”.
2. Digitise
Long gone are the days when supply chains can be efficiently managed using spreadsheets and emails. Consumers expect high quality products delivered quickly, with value added extras; and retailers need to keep up in order to stay competitive.
One benefit that many retailers are keen to gain from digitisation is the ability to shorten lead times through a reduction in sourcing time, faster production lines and quicker, more efficient deliveries. The move from manual to digitised supply management processes provides retailers with a multitude of benefits: real-time data, audit reminders, order tracking and evidence of legislation compliance, as well as increased speed to market.
3. Utilise a supply chain map
The value of a supply chain map is often underestimated. Far beyond being just a ‘pretty picture’, a supply chain map offers the information required when it comes to planning. The inability to visualise supplier locations often leaves audit visits (internal and external), moving around a country or area unnecessarily. You might not realise that you have 10 suppliers within a 20km radius of Dhaka – but with a supply chain map, you can visualise your trip in the most productive, cost-effective way.
4. Embrace big data
The supply chain is thought to be the biggest disruptor within the retail sector, with 22% of businesses having experienced in excess of 10 supply chain disruptions in one year. Risks involved in the supply chain require proactive planning and mitigation, rather than reactive handling.
Accenture identified the benefits of embracing big data analytics into business operations as:- The ability to measure improvements in supply chain efficiency
- Faster and more effective reaction times to supply chain issues
- Improved traceability
Other benefits include cost reduction, time saving, product development, identification of new markets, understanding your online footprint together with improved supply chain transparency and risk mitigation.
5. Adopt sustainable practices
In the 2020 KPMG Survey into Sustainability Reporting revealed that that 80 percent of N100 companies worldwide now report on sustainability, but whilst talk is great, that needs to be accompanied by actions that extend across the entire supply chain.
As well as having positive effects on the local community and wider environment, sustainable practices can have huge business benefits too, including:
- Improved brand image
- Risk mitigation
- Legal compliance
- Increased efficiency
- Financial gain
Ultimately, the goal is always the same for businesses when it comes to the supply chain: to create a sustainable, reliable and cost-effective chain without sacrificing ethics or quality. This can’t be achieved alone and it’s key that collaboration between businesses, governments, the public and NGOs occurs to share ideas, successes and failures.
Supply chain operations are often forgotten about when it comes to reviewing important business functions. However, for brands and retailers, without the supply chain, there is no business.
You can talk to Segura about improving your supply chain, from supplier management to legislative compliance to rebate entitlement. Contact us here.
