When a pipe in your house is leaking, you get it fixed. Not just because it creates a giant mess, but because broken fixtures are costly and wasteful. It’s a no-brainer to repair the problem so you can save money in the long-run.
In business, the supply chain is one area that can end up costing you millions if left unchecked. As purchase orders are shuffled from person to person and altered several times, lack of visibility into the supply chain results in late deliveries and broken customer promises. And customers aren’t a very forgiving group. If your supply chain isn’t optimized, it could end up hurting your customer loyalty and bottom line.
62% of organizations report the main consequences of supply chain disruptions are financial.
- Business Continuity Institute
Looking to improve supply chain costs? Digitizing your system should be at the top of the list. Here’s a simple list of ways to combat inefficiencies and drive down costs with supply chain optimization.
1. Stop using spreadsheets for tracking and analytics.
You might have an ERP in place to help with data flow. But the sheer volume of data makes it extremely difficult to use these systems for real-time decision-making, forcing you to turn instead to manual methods like spreadsheets. The problem with spreadsheets and (even worse) paper forms is that they don’t provide an up-to-date picture of your supply chain. The second you pull a report, it’s immediately out of date.
In addition, manual processes invite human error, leading to models built entirely on inaccurate information. Today, the savviest companies are turning to automated supply chain management for the greatest agility and reaction times. When supply chain data is digitized, it’s immediately available, helping you:
- Bypass roadblocks and bottlenecks to save time
- Keep teams nimble
- Save money on errors and misinformation
2. Prioritize compliance.
Compliance is one of the most complex and expensive supply chain processes. Yet, as new trade and data compliance regulations come into play, some organizations continue managing it on their own. When supply chain compliance is automated, however, digital records, processes, and alerts minimize execution risk across the board.
Supply chain management software allows you to reassure key stakeholders and customers that their needs are being met — without making your team do major digging or backtracking. Digital supply chain compliance solutions help you save time and money, letting you:
- Rate vendors, factories, and mills
- Generate vendor reports for ultimate transparency
- Ensure an ethical supply chain
3. Empower teams and partners to communicate.
Communication is a key indicator of supply chain performance. In a single message, teams can level-set, approve, modify, or veto decisions, keeping individuals across departments nimble. Yet, a large number of teams remain siloed, leading to disjointed service, low productivity, and missed opportunities. Instead, you need instant access to your employees, suppliers, manufacturers, and distributors to move quickly, take action, and change course if needed.
Sure, there are many internal collaboration tools available today. But it’s critical for supply chain professionals to communicate within the same platform they manage their business processes. Digital supply chain management allows for:
- Direct commenting and reviews on products
- In-app chatting for quick message relay
- Seamlessly uploading of files within every stage of the product lifecycle
- External communication to suppliers, manufacturers, and distributors
Customer expectations are higher than ever. To deliver, it’s critical that your “house” is in order. Our own research shows that supply chain management software reduces COGS and operating overhead by up to 15%. By making your supply chain digital, you can create transparency across the entire process, going above and beyond to keep customers happy and your bottom line healthy.