If you want to improve how your supply chain operates, look no further than your supply chain management team. Often many supply chains are dysfunctional because they're simply not formed correctly. There is little organization between how employees communicate and work together, and this affects how quickly and efficiently the company can both ship products and exceed customer expectations.
Here are some ways you can make improvements:
1. Separate Labor into Segments
Texas-based Commercial Metals Company, a manufacturer, recycler and marketer of steel and metal products, had a problem, according to Supply & Demand Chain Executive: They were expanding quickly, and needed to find a way to keep up with and continue to exceed client demand and expectations. Their solution: Reorganize their supply chain by separating the divisions of labor and introduce SAP software into their operations.
To restructure their operations, they hired a consulting firm which suggested breaking up their labor into a number of different groups. Here are a few of those groups:
- Supply Chain Capabilities Group: These employees manage supply chain tools and software such as supply risk analysis, supplier scorecards, SAP software, business intelligence reporting and other vendor data contained in the SAP software system.
- Logistics Group: This group handles CMS's entire fleet of vehicles including trucks, railcars, barges, leased ocean vehicles and trailers.
- Supply Chain Optimization Group: Different than the supply chain capabilities group, these employees manage what's called the sales, inventory and operations planning process, more commonly known as SIOP.
After the two companies broke down the supply chain into manageable groups, they began to fill them in with highly qualified employees (which we'll discuss more in the next segment).
The end result of this lofty endeavor was $76 million in savings, according to CMS's senior management, and an inventory reduction of 444,200 tons. As you can see, it's often best for companies to construct the foundation of their supply chain strategy before they put up the walls to the rest of their supply chain management program. By first separating supply chain operations into manageable segments, it's much easier to stay focused on the end goal, which is to create a supply chain that works for you instead of against you.
2. Employ the Right Employees
When the consulting firm was looking to fill Commercial Metals Company's newly created groups - some of which we described earlier - it looked inward instead of outward for talent. This strategy helped them in a few ways:
- Experience: Internal employees have proven industry experience, they're often already well-versed in the company's offerings, and they understand how the business operates as a whole. This deep background allows them to seamlessly transition from one department to another.
- Reduced Costs: Hiring or promoting from within can significantly cut down on HR and training costs. In turn, management can invest additional financial resources into other areas of their business like automated data collection solutions.
- Cross-Functional Capability: Existing employees that move from one department to another can provide greater value to their company than outside candidates. Why? When they make decisions they're better able to predict how their choices will affect multiple stakeholders across the company.
Companies benefit in a number of ways when they search for talent within their four walls before searching for professionals elsewhere. But no matter where they find their employees, the same rule applies: It's important to hire people who will help your supply chain management plan run smoothly.
3. Improve Communication
How many times have you read articles about how important workplace communication is to an employee's performance? By now, they've become so commonplace that many professionals probably just brush them aside. But they shouldn't.
Communication is like a highway and messages are the cars traveling down in it. Any obstacles that hinder their movement, such as data silos, poor presentations or even inconsistent staff meetings can result in reduced warehouse productivity and efficiency. As you might imagine, this can cause delays in shipping and receiving, which ultimately damages the company's bottom line.
Gregg Richard Macaluso, an instructor that teaches supply chain strategy and innovation at the Leeds School of Business at the University of Colorado, told Inbound Logistics that teams rarely all congregate to discuss projects and this hinders their ability to communicate effectively.
"We're less able to communicate across the supply chain than ever before," said Macaluso. "The number of times team members actually meet in the same place where they can communicate effectively is limited."
In order to put together the best supply chain management team, managers must focus on improving communication between employees. Here are some tips:
- Regularly Meet with Team Members: As Macaluso pointed out, employees don't meet often enough. If a similar issue exists in your workplace, fix this problem by scheduling regular meetings with employees. Discuss industry trends and updates in the world of inventory management.
- Provide Clear Direction: If your team is undertaking a new project or setting expectations for new goals, provide them with clear direction so they can be successful. If you don't, there's a good chance they'll fail to exceed expectations and your supply chain management strategy will falter.
- Use Advanced Warehouse Inventory Tools: Some companies still record data manually, and while this is okay in some instances - leaning on this practice too often can severely restrict the flow of information from one side of the office to the other. Automated data collection solutions that link directly to your enterprise software systems allow employees to quickly update their databases, which can then be accessed by workers in real-time no matter where they're located.
Place Value in Team Building
Everything we've discussed in this article revolves around one central idea: Without a strong team - forged through separation of labor, best hiring practices and resource allocation - a supply chain management strategy will falter. Take the time to carefully construct your groups and provide them with the latest technology, such as automated data collection tools, to help them succeed. Your entire company will be better off for it.