How Businesses Are Keeping up With Rapidly Changing Supply Chains

August 22, 2022
Supply Chains

In the last few years, everyone has heard the phrase “supply chains” more times than they could hope to count. Supply chain disruption has manifested in ways that were never possible before, largely because of how globalized the modern economy has become.

Globalization has made a lot of amazing things possible, but it comes with new formidable challenges. Among those is rapid disruption. Supply chains change very quickly these days, and businesses need ways to stay ahead of it all. One of the best ways to improve your supply chain management is with a little strategy. With professional supply chain planning resources, you can revisit your whole supply chain and find ways to become more flexible and save money along the way.

In general, businesses are enhancing their supply chain planning by focusing on four key ideas: network design optimization, routing and flow path optimization, production optimization, and cost-to-serve analysis.

Supply Chains

Network Design Optimization

The word “network” can refer to a lot of things, but in reference to supply chains, it’s the overarching connected systems that run your supply chain and supply chain management. Network design optimization is big-picture optimization. It’s the process of making everything work on a holistic level, so it’s clearly important.

Whether you’re using software or hiring a specialist, network design optimization will involve a careful look at your supply chain plan to find what is strong and where there are opportunities for improvement. Optimization requires analysis of the shipping philosophy, production process, vendors, suppliers, and a whole lot more. Generally speaking, network design optimization is where you find the greatest potential for saving or making more money.

Routing and Flow Path Optimization

Zooming in a bit from the network, a business can also analyze its routing and flow. This moves into the specific channels and tools used to move materials. It’s the nuts and bolts of the supply chain as it relates directly to your business.

Optimizing routing and flow paths is largely mathematical. The optimization process typically starts with an assumption that you need all of the parts, people, and resources tied into your flow path. So, the optimization is really looking for the most efficient routes to make sure all of those components flow as freely and cost-effectively as possible.

Production Optimization

 Getting into even more specific areas of supply chain planning is production optimization. Assuming your business makes goods, production optimization is clearly an essential way to help you manage your own supply chain.

 If production is too slow, you can get a backlog of orders and store too many raw materials or resources that you use in your processes. If production gets ahead of schedule, you have a bunch of goods sitting around waiting to be sold. Production has to sit in the sweet spot. And, naturally, you want your production to be as  cost-effective as possible.

In terms of optimizing production for supply chains, the goals are primarily focused on production times, cost-to-benefit ratios, and downtime. If you can improve your numbers in those three areas, the production cycle will blossom, and the business will shine.

Cost-to-Serve Analysis

Supply Chains

In a fast-changing world, you need reliable ways to make fast decisions without making any major mistakes. For many people, that means turning to math. Real-time analytics are possible in pretty much any facet of running a business, so using those analytics to inform fast-paced decisions is a good thing.

Cost-to-serve analysis is a way to bring that idea to bear. The analytics provide numerical representations of the decisions at hand. You can see how much it will cost to have a shortage in any part of your supply chain. Or, you can anticipate the total cost of switching to a different shipping company. You can analyze any number of other things as well. As long as you have analytical resources that can put hard numbers on costs and decisions, you can let math guide you to avoid the most costly mistakes.

Overall, these are four areas of focus where many businesses are finding ways to improve their supply chains at the planning stage. From designing a better network to providing analytics on individual business decisions, each element of strategy provides clear value to any business. When you want to stay ahead of rapidly changing supply chains, technology is offering reliable solutions with long-term potential benefits.

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Business · United States

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