Editor Note: Today’s Blog is from Darren Palfrey, the COO at Gravity Supply Chain who shares the 5 supply chain best practices to keep your supply chain synchronized. Gravity Supply Chain is a cloud-based software platform that helps logistics providers offer real-time supply chain visibility to their customers.
In today’s fast-paced society, businesses can’t afford to slip up when it comes to their supply chain. Consumers expect nothing less than perfect order fulfillment: the right products delivered to the right place, right now, in perfect condition, at the lowest price. Failing to meet perfect order fulfillment can lead to catastrophic costs for your business. You’ll have to go through the entire process again in hopes of getting it right, and even then, the customer may not be willing to give your company a second chance.
The problem is that we don’t live in a world of perfection. No one is perfect, so of course, no business is perfect, and it naturally follows that no supply chain is perfect. There’s no way to avoid every mistake, and inevitably, some part of your supply chain will not go according to plan. But in business, you don’t have the luxury to say, “I’m sorry, we messed up. Nobody’s perfect.” If you lose one customer due to a mistake in their order, that’s bad enough. If they leave a bad review of your business, you might lose countless potential customers. So, while you’ll never be able to truly deliver perfection every time, it’s important to add some supply chain best practices to keep your supply chain as organized and in sync as possible to ensure that you come as close as possible.
Think of it like an old, wooden warship. There are many different elements to make sure the ship sails, and it needs a sizable crew to handle all of those elements. A ship needs sailors, carpenters, gunners, people to handle the rigging, someone to keep stock of the supplies, a Captain, and several hands to keep the ship clean. It’s a vast crew, but if they don’t all work in tandem, the ship won’t sail properly, and it will be vulnerable to storms and attacks. Your supply chain is the same way. One link out of sync is all it takes to weaken your business.
When it comes to staying on top of your supply chain, here are 5 supply chain best practices to live by:
1.Maintain Open Communication and Visibility
The first of the supply chain best practices is to make sure that everyone involved in the process knows exactly what’s happening so they can track the progress in real time. That means open communication with your manufacturers, suppliers, all of your shipping destinations, and your customers. A lack of communication can lead to things being done twice or not being done on time at all. The more visible your supply chain is, the less mess you’ll have to clean up and the less you’ll have to stress about the process. The less you have to stress about the process, the more you’ll be able to produce. It’s a win for everyone.
The best way to do this is with a centralized system of communication between trading partners. Make sure all of your relevant contacts can be found in one database, rather than having to scramble from platform to platform in hopes of keeping track of everyone. A centralized communication system will lessen confusion and help everyone to stay on top of their tasks and their progress much more quickly.
2.Take it One Step at a Time
We live in a world of instant gratification, and much of a business’s value is found in how quickly they’re able to deliver a product to a customer. Because of this, it’s tempting to try to hurry the process along, but as always, rushing leads to mistakes. You’ll find that your supply chain is much more efficient if you take things one step at a time and set realistic expectations for the time it will take. And, as stated above, keep everyone informed of those expectations so that there’s no confusion.
Mistakes from trying to rush the process will slow you down in the end. If you find an effective method for picking up the pace of the supply chain, by all means, use it. But don’t try to do everything at once.
3.Have Clearly Defined Management
Who collects the data to inform the supply chain? Who performs quality control on the orders before they’re sent to their next destination? Who informs the manufacturers when a new order has been placed and who manufactures those orders? Your supply chain could be quite expansive, and that’s usually a sign of success, but don’t forget that too many cooks can spoil the broth. Similarly, trying to manage and oversee every aspect yourself might lead you to miss some important details.
The solution? Make sure every link in the supply chain is a trusted source with a clearly defined role and is carefully managed within itself. Assign quality control at specific stops in the supply chain to make sure everything’s running smoothly, and then move on to the next step. If each specific portion of the supply chain is trusted and well managed and your communication is strong, it makes it easier for you to manage the whole.
4.Measure Your Performance As You Go
Tracking your performance as you go may seem tedious to those who just want to get the job done, but it will save you from any unpleasant surprises at the end of the year. Keep a regular account of your performance, the amount of times you got it right as well as the amount of times you got it wrong.
A Gartner/AMR study shows that retailers typically pay anywhere between $585 and $1,000 per vendor in supply management costs. If you are regularly turning out perfect order fulfillment, this could be a worthwhile investment. However, if your supply chain is not in sync, this could be costing your business dearly. Measuring your performance and the performance of your trading partners on a monthly basis will allow you to know what parts of your supply chain are working and what isn’t, so you can cut loose anything that’s dragging you down.
5.Mistakes Will Happen. Have a Plan
This is the painful one, but as we mentioned, no one is perfect and it’s impossible to avoid every mistake every time. Eventually, one of your customers is going to receive the wrong invoice or the wrong product. Maybe the product will be damaged, or maybe it will be late. How you handle a complaint from a customer will determine your ability to keep their business.
First, make sure that they know that their input is valued, not by offering some automatic “Thank you, we value your input,” message but by responding promptly, apologizing, and letting them know that you are taking steps to do better in the future. Next, make sure to promptly offer a solution to the problem. If the product is broken or misplaced, typically the best thing to do is to offer them a replacement and/or a refund. If they were overcharged, let them know as soon as possible that you will refund the difference, or go the extra mile and refund the product. Whatever you do, do it as promptly as possible. The cost of a refund or replacement product is small compared to the cost of a lost customer or a bad review.
Ultimately, it all comes down to having a team of trading partners you can trust who are excellent at their clearly defined roles and keeping open communication in real-time. Using these supply chain best practices will help your supply chain run smoothly, which aids in perfect order fulfillment and customer satisfaction.