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Managing inefficiencies in your supply chain

Managing inefficiencies in your supply chain

Time lag, excess inventory and conflicting objectives can all affect your supply chain, which in turn will decrease the efficiencies and overall output of your business. Here are some ways to stay on top of supply-chain inefficiencies to save your business time and money.

 

Excess inventory

Excess stock can take a big hit on your business’s funds, both in terms of the cost to buy it and the required storage space. To prevent this, ensure you have an efficient ordering and replenishing system in place.

Try to avoid planning too far ahead. For example, having enough stock to last a few months instead of 12 months will ensure you can meet demand but won’t have excess stock in storage. Sitting down and forecasting will also help you determine how much stock you actually need, instead of having extra ‘just in case’.

Time lags

Time lag is how long it takes for you to receive a product once you put an order in. The more people who are involved in your supply chain, the greater the potential for time lags.

Don’t rely on just one supplier. This will ensure that if one company can’t get your products quickly enough, there will be others you can depend on.Also use local suppliers when you can to reduce the distance the products need to travel. Dealing with suppliers who manufacture their own goods will also help remove parties from the supply chain.

Conflicting objectives

Conflicting objectives can occur within your business as well as outside it. Within your business, this can lead to a situation where departments’ objectives don’t match your business goals.

Ensure you communicate your business objectives to everyone in the company on a regular basis. Also deal with conflict as quickly as possible to avoid it getting out of hand and impacting on customers.

Outside your business, ask the people in your supply to keep you informed. For example, advance warning of any price increases from your supplier will allow you to warn customers of price changes and help soften the blow.

Use technology

Some companies have developed software to help maximise a business’s supply chain, such as inventory. This can help you easily monitor your inventory levels, where the products are located and when they were purchased. It can also save time and make your supply chain more efficient.

An inefficient supply chain can cost your business significant amounts of money and time. However, making sure all the weak links in your supply chain are ironed will allow your business to run as smoothly as possible.

Onboarding a new supplier into the mix can be a tricky operation. Find out how to ensure your supply chain stays stable when you introduce a new supplier.

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