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Planning Your Supply Chain Strategy Featured

Planning Your Supply Chain Strategy "UX Work: Woman

The beginning of a new year is always the start of new challenges. It can be not easy to know where you want to go and the efforts that you need to put in for success. In the supply chain, it is difficult to put things in order and start a new year on a high note considering the events of the end year. As such, you need to develop concrete plans that will help you out of the confusion you are in and assist you make better decisions. Here is how you can build a strategic plan to propel your supply chain strategy.

  1. Define your key supply chain goals and results

Start by looking at your business model and that of your competitors. List down the goals and results that you want to achieve. Some goals can be to maintain on-time delivery performance at 90 percent or higher, manage working capital at $3 million, enhance supplier on-time delivery or improve ERP planning parameters to achieve an on-time performance. Other goals can be to reduce lead time and minimize the cost of logistics.

  1. Define the tactics and initiatives to achieve goals

Generally, tactics are a set of short-term initiatives that one is taking to achieve their long-term goals. They can contribute to the organization’s long-term strategies. Some examples of tactics you can set may include developing individual personal developmental plans for every supply chain team member, developing advanced project management skills and delivering cost-out projects committed to freight and warehousing spending.

  1. Diversify your strategy

According to McKeown, “strategy is about shaping the future and is the human attempt to get to desirable ends with available means.” In the definition, what stands out is “desirable ends with available means.” While being ambitious is a good thing generally, you must consider the means you have that can allow you to achieve your goals and strategy. The themes of a strategy may include 100 percent deployment of materials and ensuring safety, developing and implementing supplier development strategy and introducing a supplier self-assessment programme, among others.

  1. Create a unified buying process

A typical buying process is largely developed or divided based on geography. Therefore, if you are going to buy goods from a particular geography, use an adaptive buying process. Furthermore, the same unified process must be used in dealing with partners. This is critical because different geography or location may require another process and technology. To achieve this, ask your clients what they want to buy and unify the processes across geographies, partners and technologies so that it becomes transparent to the user.

  1. Diversify your manufacturing and sourcing

As supply chain disruptions have shown the problems in the past three years, procurement directors realize that relying on a single source for products can be risky and catastrophic. For example, in 2019, the COVID-19 pandemic stopped the movement of goods and brought supply chains near total collapse. From these lessons, it is important to diversify your network through multi-sourcing. Develop a diversification strategy to address potential problems that may occur in case of a disruption. A supply chain company that cannot develop a strategy that follows through unforeseen circumstances may suffer substantially. Therefore, forge a relationship with suppliers that have capabilities in multiple locations.

For a successful supply chain, you must develop a well-conceived plan. However, it is important to know the difference between tactics and strategy when developing your plan- without this, you will end up going around in circles. Furthermore, you need to observe what has already worked somewhere else and learn from them.

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Scott Koegler

Scott Koegler is Executive Editor for PMG360. He is a technology writer and editor with 20+ years experience delivering high value content to readers and publishers. 

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