5 Ways to Improve Your Supply Chain Strategy

A supply chain is a system handling the production and distribution of goods. This system is used to manufacture products and services from raw materials and sell them to end customers.

A well-functioning supply chain strategy is the pillar of a profitable enterprise. However, this process can be extremely hectic and disorientating as it includes various stages, people, and information.

If your business faces supply chain problems, you may need to consider applying the following suggestions to your strategy!

1. Choose Your Suppliers Wisely

Having quality suppliers is a significant step on how to improve your supply chain. The supplier-buyer relationship should be based on mutual communication and understanding. Each other’s prosperity is directly affected by one another.

If your supplier offers you raw materials at affordable prices and delivers them on time and accurately, your manufacturing process will work flawlessly. If this isn’t the case and your line of production is falling behind, then you might need to consider finding new suppliers.

2. Implement ERP System

An Enterprise Resource Planning inventory management system like Megaventory can be your all-knowing personal assistant! At the touch of a button, you’ll have all the information you need to make your next move.

Using an ERP system will boost your business’s productivity and efficiency. You can keep track of your activities, production, raw materials, sales rates, stock availability, and much more.

Moreover, by standardizing procedures like restocking, you won’t need extra employees to keep an eye on items’ availability. You will never run out of stock again while overstocking or understocking will not be a problem for you!

3. Know Your Inventory Throughout

One of the main obstacles a supply chain may face is an unclear view of its inventory. Knowing exactly what is and isn’t available, when to restock your products or raw materials, and how many items you need is of utmost importance.

If for example, your business is running low on raw materials, the manufacturing process will be hindered. Subsequently, the delivery of products will be delayed, creating mistrust between you and your end buyers or distributors, which will ultimately affect your income.

4. Utilize Demand Planning

Demand planning is the act of estimating a product’s demand during a specific period of time. By collecting data and analyzing sales rates and statistics, you can approximately decide which items you will need to manufacture at a higher rate, and which raw materials you’ll need to do so.

When you’ve acquired this information, you need to communicate with your supply chain partners to make sure you’ll meet market demands.

In addition, you will be able to roughly produce the number of items you need and avoid losing revenue. Meanwhile, having just the right amount of inventory will lower storage and warehouse costs and increase inventory turnover.

5. Review Current Practices

Even if your supply chain is up and running, you should not rest easy that it works the best it could. Run tests, check your sales rates, your profits, and losses, and try new methods of doing things! You never know what may pop up.

You may need to make minor or major changes or you may not need to change anything at all. The point is to be aware of how to improve your supply chain and the only way to achieve that is by regularly checking your progress.

Summing Up

If your supply chain isn’t running as smoothly as it could, there’s no need to worry. Implementing the above changes will boon your operations and cut down on your expenses.

Most of the changes mentioned in this article could be easily applied by using an ERP system like Megaventory, the online inventory management software. You can learn more about ERPs and how to choose the one that fits your needs here!