8 Simple Supply Chain Optimization Tips to Help Your Business

Supply chains have become complicated ecosystems over time. From manufacturers to retailers, every business relies on its supply chain to keep its business running smoothly. Supply chains optimization helps ensure that they do not face disruptions and bottlenecks.

Older supply chains usually consisted of internal systems that were simple and straightforward. However, in recent years, global digitization and the use of the Internet have expanded the reach of businesses and the complexity of their supply chains. This is where supply chain optimization comes in. The goal of supply chain optimization is to refine supply chains in a sustainable and scalable manner.

Optimal supply chains help businesses keep better control of their internal processes and can also give businesses a significant competitive edge. To help you get started with it, here are 8 simple supply chain optimization tips that will help you create a better supply chain.

1. End-to-end Visibility and Centralized Management

If you have read our guide on supply chain resilience, you already know that optimal supply chains are resilient and flexible. The only way to achieve it, however, comes down to strong centralized management.

Optimized supply chains are always backed by a hyper-aware supply chain management team that has a greater understanding and visibility of the various entities involved in your supply chain ecosystem.

Supply silos are a fairly common problem in large, complex supply chains. In simple terms, various parts of a supply chain can become functionally independent, reducing overall organizational visibility.

Optimal supply chains break this practice by creating a standardized process throughout their supply chain to keep disruptions and bottlenecks to a minimum.

2. Efficient Communication between Various Entities

This is the most important aspect of optimizing your supply chains. Miscommunication is a common problem in global supply chains. It is crucial that you create transparent communication between various entities in your supply such as suppliers, forwarders, warehouses, etc.

Good communication between all entities will help navigate delays, and disruptions, and will help create solidarity and familiarity between everyone involved in your supply chains.

3. Inventory Tracking and Management

Inventory management is the process of ordering, selling, and using a company’s inventory. While inventory management is a separate process from supply chain optimization, good inventory management will help you.

A well-tracked and managed inventory can help you prepare for surges and drops in product demand. A supply surge/shortage can be avoided with efficient inventory management by helping you communicate to your suppliers and supply chain teams beforehand.

4. Shipping Data Analytics and Reporting

Supply chain data analytics and intelligence is very important to create an optimized supply chain. With detailed analytics for their supply chain, businesses can make quick data-driven decisions to prevent disruptions within their supply chains.

Tools like Trademo Intel help optimize supply chains with the help of global shipping and data and trade data analytics. You can also use Intel to find buyers/suppliers for your business.

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5. Negotiation and Renegotiation

Supply chains can go a long way in determining the prices of your final product. It is imperative that your supply chains do not cross a certain monetary threshold. Cost-cutting is the ultimate optimization in the process.

Try to negotiate with suppliers, warehouses, etc. and look for opportunities to reduce your prices where needed. Find alternative suppliers, cheaper forwarders/shipping lines, etc. Renegotiate your existing supply chain contracts and do whatever is necessary to reduce your costs.

You can use Trademo Intel to find potential alternatives to your existing suppliers, forwarders, and more easily.

6. Preemptive Planning

Planning is crucial for optimal supply chains. Plan ahead with all your requirements and manage your business timelines strictly. Bad planning can significantly increase your costs and disrupt your supply chains.

Try to outsource work where needed. For example, you can find a freight forwarder and outsource a lot of supply chain documentation. Similarly, you can outsource warehousing to a warehouse manager.

7. Multi-Channel Approach for Demand and Supply

A point discussed in detail in our supply chain resilience guide, having multiple suppliers for your raw materials can help you make your supply chain flexible enough to circumvent shortages within the supply chain.

You can use Trademo’s search company feature to find new alternative suppliers for your business. It’s completely free to use!

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8. Localized Manufacturing

Once you have standardized your business processes, you can optimize your supply chains by localizing the manufacturing of your products. Localization often helps reduce costs and decrease the pressure on your overall supply chain.

For instance, localized manufacturing will allow you to have distributed inventories so you could potentially tackle disruptions in your supplies. Localized manufacturing also offers businesses other benefits such as less transportation and warehousing costs, more efficient delivery times, and more.

Summing Up

Supply chain optimization is one of the most important goals for a business. An unoptimized supply chain is prone to disruptions, delays, and shocks. These tips should help you optimize your supply chain like never before.

With resiliency in supply chains becoming more important each day, it is imperative that your business starts optimizing its supply chains. An optimized supply chain will help you ensure that your supply chain performs at its best and is ready to face potential disruptions and supply chain “shocks”.