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How to manage your supply chain

How to manage your supply chain

Nobody in business goes it alone and we all rely on partners and suppliers to keep things ticking along. When choosing suppliers, you want to be completely sure they will measure up, as the wrong decision can send ripples throughout the entire chain of operations.

Here are some considerations you should be taking into account when bringing a new provider into your circle of trust.

Go in with clear objectives

Good supply chain management isn’t always about saving money – in fact, going straight for the lowest bidder can often end up costing you more. Put some thought into larger goals and benefits. You may want to reduce time-to-market for your products, achieve greater efficiencies, reduce your risks, or improve customer satisfaction levels. Use this analysis to create a checklist of capabilities and qualities that your new supplier must be able to bring to the table.

Have a good service level agreement

Bringing any type of outside contractor into your business is always a risk, so make sure your service agreement is properly documented, with all responsibilities (and liabilities) clearly laid out and agreed to, in writing, by all parties. With more complex agreements, you may also want to cover supplier management mechanisms, such as average delivery times, cost overruns and reporting of safety concerns.

Compliance and safety must come first

Always keep in mind that your decisions will directly influence your suppliers’ decisions. Will they ask their drivers to spend an unsafe amount of time on the road to meet tight delivery deadlines or to exceed safe load limits? If an accident occurs, you may be liable. Check the supplier’s safety record and make sure your safety and compliance policies measure up, too.

Sync your processes and technologies

A supply chain has many inputs and inter-dependencies. Cloud computing technologies, software as a service (SaaS) and mobile computing can streamline (and even transform) your supply chain management, with just-in-time delivery and real-time goods tracking now business as usual. Does your supplier embrace innovation? Will their systems work seamlessly with yours, eliminating duplicated effort and data, and reducing risks and overheads?

Supply chain management usually accounts for much of the cost of providing goods and services, and it affects every part of your operations. Think of your suppliers as not just business partners, but as part of your business.

A key element to check out with any new supplier is their compliance records. Is your own compliance up to scratch?

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