Global supply chain optimization is simply taking a closer look at and revamping your current supply chain to operate at its best. Your supply chain is the backbone of your business, no matter what role you play in purchasing and procurement. Global supply chain optimization requires solid supply chain management (SCM). So, what is supply chain management?
SCM includes all of the processes that transform raw materials into their final products. It is centralized management that also includes managing the flow of all goods and services. Supply chain management is vitally important—approximately 79 percent of companies that participated in a recent survey revealed that optimization significantly increased their ROI.
Having a floundering supply chain, whether it’s due to a lack of centralization or outside factors, can be disastrous. For example, there are many supply chain vulnerabilities due to the chip shortage in the automotive industry. This automotive chip supply chain shortage adversely affected the supply chain for auto semiconductors.
This is but one example of a supply chain crisis, where everything must be reconfigured to get the supply chain back on track.
Read on to learn more about global supply chain optimization, supply chain logistics, and how to optimize your global supply chain to ensure it operates at its peak performance.
Examine Your Current Supply Chain
One of the first steps in supply chain optimization is to evaluate how your current supply chain is performing. The end goal is to have the highest margins and lowest costs possible while keeping customers and internal stakeholders satisfied. Your relationships with suppliers are important as well.
eSourcing is one step of the supply chain process that will streamline your procurement processes and improve relationships with suppliers. It also opens a door of opportunity for new suppliers that could ultimately bring more value to your supply chain
How you use analytics and your software is imperative. Is it fully digitized and integrated? You’ll need these capabilities to collect data that will enable you to make smart, sustainable decisions, including:
- Your costs and contract terms with current suppliers
- Opportunities for cost savings
- Opportunities for supplier consolidation
Invest in the Right Technology for an Optimized Global Supply Chain
Your software and IT infrastructure are vitally important to the flow of your supply chain. Having the correct software and analytics can help to give you insight into who you’re working with, what you’re paying, and identify opportunities for greater efficiency. You’ll get a broader picture of any potential supply chain issue, including supply chain shortages.
There are many best practices for supply chain management and optimization, but investing in IT and other technologies (mobile/internet) is a must. As you consider your software and infrastructure, take a close look at your budget considerations and operational goals to determine the most productive tools for your business.
Use Centralized Management Software
As previously mentioned, it’s imperative to have the right software to optimize your supply chain. This is because a centralized system allows all of your departments to work together to achieve the best ROI. Using centralized management software (CMS) gives you the ability to have your financial, sales, inventory, and other departments work together to form a single unit.
Your CMS should have an intuitive interface and admin dashboard that allows you to perform functions and processes such as eSourcing, reverse auctions, risk management, spend analysis, and more.
Additional Tips to Optimize Your Global Supply Chain
Proper evaluation and implementation of different systems will optimize your global supply chain.
- Ensure good communication between you and your suppliers.
- Outsource. Many companies want to do everything in-house, but that can slow down your process.
- Use a multi-channel approach for your supply chain.
- Know exactly what your customers’ needs are.
- Set targets to achieve end goals and track progress against them.
- Have patience while everyone becomes familiar with the software, including suppliers.
- Ensure your staff is trained and up to date on all aspects of the supply chain.
- Have leading indicators in place to help spot looming trouble before its too late.
For more information on optimizing your supply chain with eSourcing software, contact Simfoni eSourcing today.