Mistakes happen. But in the logistics industry mistakes are costly. Companies should be aware of common inefficiencies that occur in the supply chain so they can work with their provider to avoid them. Here are 5 common mistakes in the supply chain to avoid:
1) Weak risk management
Supply chain risk management (SCRM). When a provider’s management is short-sighted, the risk for inefficiencies in the supply chain becomes greater. A lot of risk management is cooperative. When a provider-customer relationship is based on clear goals, they’re able to collaborate to identify and analyze risks that are unique to the customer’s supply chain challenges. This kind of communication is the first step to avoiding inefficiencies.
But a provider’s capabilities are also important. Logistics providers should be competent in risk management analysis which means they should have the technology and expertise to control and monitor efficiency. With target goals and good communication, providers can use optimized technology and strategies to lessen risks.
Ultimately, strong risk management is added-value. Fewer risks mean fewer complications. When you aren’t doing damage control, you’re able to further strengthen your company’s supply chain operations.
2) Reactive management
Last week, I wrote about the importance of proactive supply chain management (read about it, here). A logistics provider needs a proactive approach when it comes to maintaining smooth functions. Mistakes and efficiencies often are the result of reactive management. Setbacks are inevitable. But when happen, they must be handled with consideration for the future.
Temporary fixes are bad news to a company’s supply chain. To avoid mistakes, providers need to be prepared to deal with mishappenings because quick fixes can turn out to be inefficient in the long run. Proactive strategies incorporate just-in-case capabilities so that when those inevitable disruptions come up you won’t end up paying for costly quick fixes.
3) Ignoring data
Analytics bring quantitative methods to maintaining and improving supply chain management for both the provider and the customer. The provider’s access to analytics can improve solutions. Unfortunately, it’s an important component that’s too commonly overlooked.
Supply chain management systems are a powerful tool to use for front-line operations, strategic choices and decision-making. A provider who isn’t utilizing the resources their technology features is missing out on the data that can catch and narrate inefficiencies and opportunities to optimize.
Customers are affected when their provider is neglecting readily available resources. Performance data can be shared with the customer and used to enhance their in-house operations.
4) Poor customer service
These days, consumers are heavily involved in their supply chain and they expect a lot of transparency. Supply chain functions aren’t behind the scenes anymore – they happen right in front of the customer. This means that a customer-centric approach is a new standard.
A provider’s performance isn’t any good without communication and customer service is at the forefront of successful customer-provider relationships.
5) Not prioritizing supply chain talent and expertise
One of the industry’s thought leaders that I wrote about (here), Brian Tobey of Microsoft, spearheaded a program that invests in the early development of supply chain talent. Supply chain management studies have become more popular and in turn, have created an increasingly complex and challenging environment.
But investing in early talent development isn’t enough. Providers need to invest in industry veterans as well – the experts. The two do not contribute to supply chain performance independently. Veterans experienced in end-to-end supply chain functions are crucial in identifying young leaders and training recent grads. Likewise, young supply chain professions lend themselves to innovative strategies with their fresh perspectives.
Investing in talent development and continuing education might seem like a low priority investment, but that’s the mistake. Logistics providers are learning that, at minimum, meeting today’s supply chain standards requires more than fulfilling any one supply chain professional’s job functions. SCM expertise should reach beyond job functions to an understanding of market trends and how to create solutions for trending challenges.
So what’s the best way to avoid these?
Knowledge is power. When looking for a logistics provider, be able to identify potential setbacks. Then be sure you have a full understanding of the provider’s risk management skills and evaluate their capability to handle the inefficiencies that will inevitably arise. Creating solutions to supply chain challenges is… challenging.
Avoiding mistakes and inefficiencies ensures the kind of performance that exceeds customers’ standards.
RTD Logistics prioritizes exceedance. They know that robust solutions are key to good performance and quality solutions do not come without proactive and smart forecasting, planning, and customer service.