The field of supply chain rose into significance a few decades ago when businesses realized that the functions such as sourcing, procurement, material management, logistics and distribution cannot operate separately as they are inter-related and are better off when combined together. In today’s context, manufacturing companies in particular attempt to increase the efficiency of their supply chain function in order to better satisfy their customers by delivering a faster service at a reduced price. In this article, we will discuss about a few areas that you must pay attention to when developing a logistics strategy for your enterprise, that will boost organizational efficiency and make it a success.
A demand driven supply
An estimated 60% of a production company’s annual expenditure is resulting from the supply chain aspect and any effort to reduce this cost will bring considerable profit advantages. Inbound logistics is the process of making the necessary goods and services available for the company before the production process commences and if this can be controlled based on the level of market demand, wastage can be reduced by considerable proportions. This does not only include the cost of shipping container hire Newcastle, but also that of transportation, inventory and information and you will be able to transfer these savings in the form of price reductions to your customers, which will boost your sales.
Aligning with the corporate strategy
Much like any other department, supply chain must also attempt to align its strategies with that of the organization to supplement the overall success. A fair amount of time must be spent by a manager to clearly identify the strategic goals of the business so that they can align the goals of their departments to make the achievement of those possible. If the company’s strategy is to become the market leader by providing the highest quality products to the customers as fast as possible, then you must take the necessary steps to increase the efficiency of the logistics function by recruiting new personnel, training the existing personnel, investing in an extra 40ft shipping container or making infrastructural improvements to the warehouse. Conversely, if the corporate strategy is to be the low-price leader in the market, your focus must be to reduce the cost of operations as much as possible.
There are a number of technologies that can be incorporated to the many sub-fields of an entity’s supply chain function and all of these are capable of making them much more efficient. Inventory management systems can help you manage your inventory in the best possible way by making accurate demand predictions based on the past. Furthermore, these systems can be accessed using a smart device from pretty much anywhere in the world, giving you and your employees the ability to keep track of the inventory all day, every day.