5 Ways to Increase Supply Chain Performance


When business people talk about supplier management, they refer to the systems, technology, and procedures that connect a supplier to a customer. An efficient and performing supply chain helps a business save money, thanks to faster client deliveries, shorter factory processing times, and better inventory management. This, in turns, reduces spoilage and decay. To increase your company’s performance, pay attention to the following key elements.

1. Improve your distribution network.

Your company’s distribution network is the operational hinge you should build around. Distribution affects everything from delivery tracking to sales strategy. The main goal is to improve your distribution network, which you can do through a holistic approach or a cluster view. In a holistic approach, you review essential parts in your distribution network and try to figure out how the parts work in sync. For example, look at your purchasing software and see how it works with your delivery system. Does it communicate well with production foreman or warehouse managers? If it’s not as efficient as you’d like it to be, you can identify where changes need to be made. Unlike a holistic approach, a cluster view groups charts, graphs, and other details together to help you keep an eye on the process for a specific function in the company.

2. Devise a distribution strategy.

A distribution strategy is integral to an effective framework for supplier management. It allows a business to have a better idea of what it takes to shorten delivery times, reduce goods decay, and improve customer service. Supplier management and the broader field of supplier chain management help a company plant the seeds of long-term financial stability. Supply chain management experts David L. Anderson, Frank F. Britt, and Donavon J. Favre indicate that formulating an effective distribution blueprint helps a business achieve profitable growth, especially when corporate managers think strategically about revenue, cost, and asset utilization.

When formulating your distribution strategy, keep an eye on things like warehouses, cross-docks, production facilities, and customers, along with the location, number, and network missions of suppliers. Set an overall goal for your distribution and implement tactics that are in sync with your overall strategy. For example, if you want your company to receive an industry award for timely delivery, figure out all key stakeholders (delivery teams, production supervisors, etc.) to partner with and essential processes to improve.

3. Monitor cash flows.

Cash flow monitoring is a fundamental tool that various organizations use to improve supplier management. It is important to track payment terms and conditions with several groups within the supply chain, forging an efficient plan to understand the technology used for monetary transfers. Said simply, companies must clearly understand how to pay suppliers and logistics companies, how often to pay them, payment tools, and any expenses that get passed to customers. Payment technology, in the context of supplier management, refers to equipment used to pay vendor bills, like point-of-sale machinery, the electronic pad the warehouse staff signs when receiving goods and shipment tracking software.

4. Establish information conduits.

Information conduits are channels businesses use to share important data, like tracking information, with key partners. To establish proper information conduits, make sure data is distributed promptly and properly to pertinent recipients. For example, if your factory foreman needs more materials, this information should be conveyed to purchasing managers as well as store room supervisors and delivery personnel.

5. Track your inventory.

By utilizing tracking software or internal spreadsheets you design, you can monitor the whereabouts of your inventory. This will help you know how much of your product you have, how much you need, as well as if anything happens to it (damage, decay, theft, etc). It is important your staff knows how this system works so they can effectively log information, as well as participate in routine inventory assessments. Other things to consider are the location and quantity of inventory, including finished goods, work-in-progress items, and raw materials.

Supplier management plays an integral role in your company’s overall commercial strategy. You can improve supply chain performance by keeping tabs on what business partners do, ensuring everyone collaborates effectively, and tracking your company’s assets.