The past 2 years have shown that relying on a single raw materials source is a recipe for disrupted supply chains and an inability to meet customer demand. A robust supply chain is achieved not only by diversity, but also reliability and resilience. An effective procurement and supply chain organization should be one that brings value to the overall organization, which is accomplished by having the right strategic and tactical approach.
We’ve outlined three actionable tips that can be used to consider how to build a more diverse and robust supply chain.
To build a reliable supply chain, consider a long-term approach. What are your immediate goals and long-term goals? Be specific about these goals and how they are related. Do you have performance metrics in place and which of these metrics are falling behind expectations?
How do you need your employees to proceed to excel at their jobs and make these goals a reality? Asking employees to address these concerns without a long-term objective may have them floundering from one task to the next without clear direction in their work, resulting in a lack of improvement in employee growth.
Developing a strategic supply chain and procurement approach involves having a clear vision of what you need to accomplish and understanding the resources that will be required to deliver that vision. Some things to consider may include:
To get started, convene a strategy planning group consisting of your company’s executives (CEO, CFO) and leadership from key functions (Supply Chain, Operations, Procurement, Sales/Marketing, Finance). Results often require a company-wide change initiative as multiple functions will need to contribute in order for you to realize true success. Sales needs to understand demand, which drives manufacturing, raw material, and inventory decisions. Underlying it all are the financial impacts that are critical to helping to shape choices and the right metrics are required to ensure you’re making informed decisions. Consider going through these areas to identify gaps in data and existing knowledge as well as areas to prioritize. Assign owners within your organization to ensure the project keeps moving forward and accountability is maintained.
Our supply chain and operations advisors are experienced in many manufacturing and distribution companies. We help find the best way to optimize your supply chain management and get the results you want.