A key part of a distribution and sales business is the supply chain. The process by which your customers receive goods is just as critical as the process by which you get them across the line to purchase in the first place.
Whether you are supplying bulk goods to a national supermarket chain or providing the service of distribution to a drop-shipping organisation, the speed and performance of your supply chain has the power to convert single purchasers into repeat customers.
Specialised Logistics Australia (SLA) are logistics and supply chain management experts in Australia, and we wanted to provide some tips and advice on assessing your supply chain and making improvements.
Read on to find out more, and remember that if you want to know more about any of the services that we provide, please contact us on (07) 3879 3500 or get in touch online.
How to assess your supply chain
There are numerous tools and reporting software options out there which allow you to compare year on year and quarter on quarter – the important thing for your ‘to do’ is to:
- Identify what you want to measure (Performance? Price? Time? Wastage? Complaints?)
- Decide how you are going to measure it (Reporting? Surveys?)
- Measure the variables
- Create a report
- Review your findings
Once you have some data upon which to base your assessment, it’s possible to start looking a little deeper. You can look at individual customers, the performance of a particular element of your supply chain, and you can make improvements as and when you see fit.
Are you using the 80/20 rule for your customers?
When doing business there is a common formula used to identify which customers are the most valuable. You’ll find that you do 80% of your work for customers who bring in 20% of your revenue, and 20% of your work makes up 80% of your revenue. Go on, think about it. We’ll wait. It’s true, right?
Although every one of your customers is important to you (because they can be nurtured to join the hallowed 20% ranks) it is vital to take care of those customers who buy in large quantities and who are influential in your industry and thus can get you more work.
You can identify your key customers with simple logistics management software and by running reports on your customers to identify those who contribute the most value. Once you have identified your key customers, focus on delivering greater value to them over time. Greater value doesn’t have to come with something like lower prices; you might offer a reduced turnaround time for a particular item or service or add value in a way that is specific to your industry.
How do you compare to your competition?
While you should obviously spend more time focusing on what your business is achieving and how you can improve your own bottom line, it’s worth poking your head up now and then and taking a look at what your competitors are up to. Take a look at some publicly-available information and compare your performance to your local competition.
What sort of delivery times are they working on? What sort of pricing? You can pivot based on information both from within and externally to your company, and it might be worth looking at whether you need to raise or lower prices to meet demand or to gather more of the market share.
What changes can you make to lower the costs of managing your supply chain?
If you have identified certain aspects of your supply chain that are costing you more money than you want to be spending, there are a number of ways in which you can make changes.
- Consider automation for your processes, whether it’s a mundane task that takes up far too much time in your day or if it’s a company-wide process that can be done remotely – automation can be a huge resource-saver.
- Think about packaging. Do you find that products are damaged when they are shipped? It might come down to the packaging you’re using.
- Look at every link in your supply chain. In order for you to have a firm understanding of the way in which money is being lost, you need to know what you can eliminate and how you can improve every process at every step.
- Consider working with a supply chain management company like SLA! We have a great deal of experience in working with companies of all sizes across Australia and around the world. We make short work of managing supply chain issues and can save you money with our dedicated service.