• Supply Chain

Tips for Demonstrating the Value of Supply Chain Management to the C-Suite

Written by Mark Gemberling
October 3, 2016

Here's how supply chains can demonstrate their worth.

Here’s how supply chains can demonstrate their worth.

Supply chain management professionals understand the value they bring to a business. It’s much more than simply cutting costs by finding efficient strategies. Success along the supply chain can lead to anything from greater customer satisfaction to innovative product design. However, those in supply chain management are often limited by perceptions from people higher up the business ladder who make resource and investment decisions.

All business leaders want to invest in company facets that will garner greater profits and drive the organization ahead of the competition. Those in supply chain management are often tasked with showing their leaders that they can be that ticket to success.

Misconceptions About the Supply Chain

There is a disconnect among executives and those in supply chain management. That is, the supply chain brings serious gains to companies, but business leaders don’t necessarily understand or see those advantages. As Supply Chain 24/7 explained, much of this stems from the highly technical nature of the supply chain. Discussion of topics like ERP implementation and asset utilization don’t mean the same thing to CEOs as they do to procurement and logistics specialists.

In fact, many senior management personnel don’t even understand all that the supply chain entails. For instance, some organizations falsely believe supply chain just encompasses logistics when it actually involves all steps from production to distribution.

Plus, the supply chain doesn’t quite pique senior management interest the way more appealing ventures, like launching a new product, do, explained Supply Chain 24/7. By this standard, not only are business leaders unable to understand the value of supply chain, depending on the way in which it’s communicated, but they might have no interest in learning, either.http:/blog/common-problems-in-supply-chain-management-processes-and-how-mobile-data-collection-software-can-solve-them

READ MORE: Tips on solving common challenges in supply chain management »

Success Stories of Valued Supply Chains

That said, not all companies push the supply chain to the wayside. In fact, Supply Chain Digital highlighted several businesses that have leveraged supply chain management to its full capacity. One such example is Wal-Mart. According to the University of San Francisco, this retail giant makes effective use of technology, which helps with collaboration along the supply chain and ensures customers can find the products they need on store shelves. Clearly, executives saw an opportunity to invest in the organization’s supply chain, and their efforts paid off. Companies would do well to adopt data collection solutions as Wal-Mart has to meet consumer demand and streamline costs.

The Coca-Cola Company also made Supply Chain Digital’s list of global supply chain leaders. The fact that Coca-Cola remains a household name speaks volumes of its success, part of which comes from its value of the supply chain. According to Global Manufacturing, the megabrand continually looks for ways to make the supply chain better and faster. For instance, progressive technologies, like 3-D printing, are always making their way into this facet of the business.

Steps to Better Demonstrate Value

Constituents of the supply chain can do their part to communicate the value of their work. It starts out with ensuring the supply chain does indeed bring advantages to the business’s bottom line. That is, is the supply chain working as efficiently as possible?

The RFgen white paper “Tomorrow’s Warehouse Today: Three Technologies for Exceptional Operational Efficiency” explained the dangers of an inefficient warehouse. On average, distribution centers waste 3,000 labor hours by not streamlining their processes. Meanwhile, inefficiency can impact the business by misplacing inventory, lowering morale among workers, losing sales due to out-of-stock items and increasing risk for worker injuries.

Should the warehouse team determine it’s in need of an intervention, there are plenty of technology solutions to revamp strategies. For one, supply chain management must do away with paper-based processes, as these set businesses up for inaccuracy and wasteful labor hours. Mobile data collection software and wireless barcoding devices are effective replacements.

Additionally, warehouses can optimize productivity by instituting voice-enabled picking. This move can speed up training processes, enhance accuracy and reduce risk for injuries. It is the ideal solution for improving order fulfillment efficiency.

Once those in supply chain management are confident of their value, they must then demonstrate with quality measurements. This involves using data to come up with metrics that make sense to executives. As noted, senior management might not care about fill rate, but they do care about sales growth and other financial metrics. Leaders in the supply chain must translate their data into meaningful numbers for executives.

It’s not just the numbers that matter, though – demonstrating supply chain value also requires effective communication. Those in supply chain management must engage in conversations with business leaders to convey their eagerness to take the company forward and ability to do so. This means jargon and intricate supply chain knowledge must be left outside the C-suite offices and replaced with easy-to-understand language.