How can you turn your logistics into a powerful value driver? With supply chain optimization!

The world is evolving at breakneck speed, bringing with it a profound transformation of our businesses. The supply chain is no exception to the rule: with revolutions such as Amazon's promised one-day delivery, the lines have moved.

Logistics has become a differentiating factor for companies, forced to satisfy ever more demanding customer requirements, even as the way in which business is conducted is becoming increasingly complex.

As a result, supply chain optimization has become a top priority for organizations. By improving the performance of their supply chain, they gain in agility and responsiveness, and reduce the costs associated with these operations.

However, this streamlining work remains closely linked to the use of innovative tools and technologies.

Set your sights on performance, thanks to our article 👉

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What is the supply chain?

The supply chain refers to the entire logistics process, from raw material replenishment through warehouse storage to product delivery to the end customer.

It therefore involves :

• The circulation of different flows:
  • material flows, i.e. raw materials for production, finished products for sale, etc. ;
  • information flows, encompassing all data linked to the supply chain (information on customers, orders, suppliers, etc.);
  • financial and administrative flows, relating to the various financial and administrative controls and processes.
    
    
• The involvement of numerous players:
  • suppliers,
  • logistics managers,
  • producers,
  • transporters,
  • distributors,
  • accountants, etc.

It's easy to see how the supply chain is a complex whole, in which each link depends on the others. A failure in one segment can jeopardize the entire chain.

The supply chain therefore has a resolutely strategic dimension. It requires perfect optimization, in order to strike a balance between its three main challenges:

• anticipating risks;
• customer satisfaction, in terms of receiving products on time and in good condition, of course;
• controlling the costs associated with the company's logistics.

💡 To gain in efficiency, organizations are increasingly turning to the expertise of a supply chain manager, whose specific function is to steer as well as coordinate all logistics flows.

Why optimize the supply chain? 4 key benefits

# 1 Control the supply chain from end to end

The supply chain is a complex whole, involving numerous flows and players.

By optimizing it, you gain visibility. In other words, you can focus your actions on a precise element of the chain, while perceiving their impact on the whole process.

At the same time, you benefit from improved supply chain traceability. Who does what? When is it done? For what reasons? You can then effectively supervise the progress of production or delivery, anticipating problems and boosting your company's productivity.

#2 Anticipating demands and risks

Anticipating demand is another major supply chain challenge. Good supply and inventory management means ordering the right quantity:

• to meet consumer needs,
• while avoiding over-production and over-stocking, which are costly for the organization.

The same applies to the risks associated with the various hazards that could compromise or even break your supply chain.

By optimizing your supply chain, you can keep your budget under control, while guaranteeing that your end customers receive their products on time.

# 3 Reduce costs

Thanks to a sound supply chain strategy, you can rationalize costs at every level: product routing, storage, delivery, etc.

With an overview of the entire chain, the supply chain manager is able to deploy certain operations more easily and intelligently, in order to reduce expenditure without damaging customer relations:

• prevent overstocking,
• reduce transport costs,
• renegotiate contracts with suppliers, etc.

#4 Increase customer satisfaction

On-time delivery and quality of service: these are two points on which consumers are becoming increasingly demanding. Competition is fierce, and a customer who is dissatisfied because of a logistical problem will not only lose confidence in you, but will also be tempted to give you bad publicity.

It's easy to see why the supply chain is such an essential component of the customer experience and brand image.

How to optimize the supply chain? 8 essential tips

Tip 1: Integrate the supply chain into the company's overall strategy

Despite the key issues surrounding the supply chain, too many companies fail to invest sufficient resources in this area. Yet the implementation of the supply chain must be an integral part of their strategy, and management must be aware of the value it generates.

As a result, the supply chain needs to be designed in such a way as to coherently serve the organization's overall objectives. In short, there are no standard models: each type of organization has its own supply chain model...

... and the budget required to deploy it! This requires, among other things

• recruitment, in particular of a supply chain manager,
• investing in dedicated tools and technologies.

Tip 2: Map and coordinate supply chain processes

To master your supply chain, you need to understand its structure, in order to :

• manage the interdependencies between the various links in the chain ;
• allocate the necessary resources to each stage.

With supply chain process mapping, the company becomes more efficient and identifies any blocking points in order to prevent risks.

💡 These processes must take into consideration all the components of the supply chain, so as to best orient tactics. But what are the 4 pillars of supply chain management activities? Generally speaking, these include :

• the resources deployed to meet customer needs (human, technological, financial resources, etc.),
• optimization of logistics costs,
• logistics lead times,
• quality of service.

Tip no. 3: Listen to and consider customer needs

The quality of your supply chain is an integral part of your brand image, and customer satisfaction must be at the heart of your strategy.

So build your supply chain to meet the needs of your customers... and especially your target customers! Indeed, these needs diverge according to your personas as well as the values embodied by your brand.

👉 For example, do you want to outshine Amazon? You certainly need to work on shortening your delivery times. If, on the other hand, your customer base seems more concerned by environmental and societal issues, then favor eco-responsible modes of transport (and communicate the whys and wherefores of this choice), even if it means extending delivery times.

Tip no. 4: Manage supplier relations as effectively as possible

According to Les Echos, "35% of the disruptions encountered over the last five years have come from Tier 1 subcontractors, 15% from Tier 2 and 5% from Tier 3 and above".

A good supply chain requires effective collaboration between all players. In this respect, suppliers play a key role. A problem at this level has repercussions for the rest of the chain.

But the good news is that companies have many cards to play to limit risks and build a fruitful partnership. For example, they can

• sourcing suppliers and ensuring their reliability and financial health at an early stage;
• diversify;
• establish a solid relationship of trust with them, to :
  • negotiate prices more easily,
  • increase communication and avoid delays.

Tip 5: Anticipate!

There are many factors that can affect the smooth running of your supply chain, and even create disruptions.

These factors are :

• external: adverse weather conditions, health crisis, geopolitical context, etc.
• internal to your supply chain: suppliers, warehouses, transport, etc.

To counter these threats, there are a number of best practices to follow:

• better sourcing of your suppliers, as seen above ;
• opt for a quality assurance approach in the event of a product recall;
• use collaborative planning between the various players in the supply chain;
• draw up a continuity plan, with different scenarios, to better respond to disruptions in the chain;
• introduce a cybersecurity policy, etc.

At the same time, you need to keep an eye on developments likely to influence the quality of your services, such as

• customer expectations,
• the actions of your competitors,
• regulations,
• geopolitical situation, etc.

Tip 6: Organize your warehouses efficiently

Alongside supplier relations, warehouses are another important lever for improvement. And for good reason: poor management has consequences for costs and the customer experience. In addition, there are issues of hygiene and safety for your teams.

To make your warehouse organization more efficient, adopt the following reflexes:

• structure spaces intelligently ;
• cross-docking;
• focus on quality control, etc.

💡 Find out more about our tips in our article dedicated to warehouse management.

Tip 7: Define and monitor your KPIs

To ensure that your strategy is properly monitored, but also to anticipate risks, you can't do without performance indicators.

There are many logistics KPIs, such as :

• fill rate,
• service rate
• stock rotation,
• average stock,
• One Time Delivery, etc.

💡 And the choice is still wide! Our advice: get straight to the point, to avoid your reporting turning into a gas factory. So select only those metrics that are most consistent with your objectives and the specific features of your supply chain.

Tip 8: Use technology to automate your supply chain management

This is undoubtedly the most important tip of this article, because in reality, masterfully orchestrating a supply chain is almost impossible without the support of technology. It's hard to work with Excel spreadsheets alone!

Today, thanks to new technologies, in particular AI, blockchain and IoT, there are tools available to streamline your end-to-end supply chain management.

In particular, they enable you to decompartmentalize your data, then connect them together, with the aim of:

• ensure the fluidity of the entire process ;
• break down the silos that inevitably lead to a lack of global visibility.

What tools are needed to automate the supply chain?

Supply chain automation is the key to successful management. And this automation essentially involves the use of specific software.

There are many different types of solutions capable of streamlining logistics processes. These include :

• WMS(Warehouse Management Systems) for warehouse management;
• ERP(Enterprise Resources Planning), for managing all company operations via a unified information system, comprising various modules (inventory management, accounting, project management, sales management, etc.);
• APS(Advanced Planning System), dedicated to forecasting sales and market trends, for planning as close to reality as possible;
• TMS(Transport Management Systems), which automate and optimize the transport of goods.

And some software is a bit of all of the above. Such is the case with Metronome, a platform developed to build and automate all your processes: supply chain, manufacturing, procurement, and so on. More concretely, Metronome connects to all your data to feed your workflows. As a result, everyone knows what needs to be done, and when, all in real time and in perfect coordination. And thanks to intelligent triggers, the actions to be taken are 100% automatic.

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What's in it for me?

Improving the supply chain is no longer an option for companies. If they want to hold their own in this competitive market, they need to turn their supply chain into a powerful vector of value, with the aim of controlling costs, but also (and above all!) pampering the customer.

This can be achieved through a variety of actions, including process mapping, supplier sourcing and warehouse reorganization.

In this context, the supply chain manager is required to orchestrate and unify practices, so as to ensure the solidity and coherence of the chain. It would therefore be hard to ignore the technologies and software designed to harness your data and put them to work to improve the fluidity and efficiency of your supply chain.