November 18, 2014 by Godfrey Huguley
Whether budget, competing IT priorities or required time away from day to day operations stand in the way, the resources required to get your supply chain project implemented can be scarce. Ensuring that your project is aligned with high priority corporate initiatives can help. When your supply chain improvement project can be shown to support or drive forward a corporate initiative, it suddenly becomes a priority as well and resources often become available.
Let’s look at some common initiatives your supply chain can support:
Margin management has been a top concern for middle-market companies for the last few years, according to the National Center for the Middle Market. This is not surprising considering the economy has been struggling, revenues have been sluggish, and companies must keep a close eye on the delta between cost and price. Margin is especially critical for mid-market companies that are squeezed between large companies with the revenues to overcome cost issues and small companies that can adjust to their key customers more easily. If margin management is a key initiative for your company, improvements to your supply chain can make a big difference.
According to another recent report from the National Center for the Middle Market, The Resilient Supply Chain, “every four to five years, a majority of companies will face a crisis. Of those that do, almost 75% will close or suffer a significant long-term impact. Of the 43% that never fully recover, just 29% will be in business two years later.”
Smart middle market companies then make risk mitigation a top priority. This is an opportunity for the supply chain: risks such as global unrest or natural disasters can disrupt the supply chain, but a risk mitigation preparation plan can not only make supply chains and the company better prepared, but improve overall operations even when there is no disruption.
In a recent series of guest posts for TAKE Supply Chain, CEO ChainLink Research, Ann Grackin shared her guidance on how to minimize supplier risk. Some key suggestions:
According to Ms. Grackin, not only does this visibility help mitigate risks, but it also provides insight into the opportunity disruptions can offer: “Understanding volatile markets and conditions better positions your firm to know when and if to take action—knowing when to buy-up scarce supply, when to hedge, when to relax.” An initiative that not only improves supply chain visibility but improves the strategic position of the company? Seems like a no-brainer.
According to a 2014 Chase survey of middle-market companies, the top challenge facing companies was sales/revenue growth. Growth brings challenges to the supply chain as well. Expanding product volume, additional regions, new and more numerous clients will mean increased complexity to manage. It only makes sense to prepare your supply chain to support the new reality.
An automated supply chain collaboration solution can help you manage this complexity with:
For middle-market companies, sustainability is becoming less about personal values and more about business sense. According to a GE Capital report, Show me the Money: Sustainability in the Middle-Market, companies see sustainability not only as part of the company’s reputation, but a key way to save money, rather than costing money. For example, GE implemented “resource usage treasure hunts” at multiple facilities, with cross-functional teams that visited sites on weekends and identified unnecessary energy consumption, like machines that are left on round-the-clock, seven days a week, but actually only need to run three days a week. The exercised has saved GE $150 million so far.
If your company has a similar focus, one area to improve sustainability and reduce waste is through reduction or elimination of paper communication with suppliers. If you are still using mail or faxes to place orders, execute PO change orders or handle invoices, moving to an automated supplier collaboration solution will replace that wasted paper.
Because the supply chain is the backbone of the business it can play a critical role in any number of company initiatives. Demonstrating that supply chain improvements can help drive your corporate priorities will make a significant difference in how these improvements are perceived and supported.
I’d love to discuss the initiatives your company is focused on in 2015, and how TAKE Supply Chain could support them – email me.