Untangling supply chains: Key considerations

Supply chain issues seem to be easing, but many mid-market business leaders are telling us that they continue to be a problem. When it comes to supply chains, certain things are simply out of our control; however, there is a lot we can do internally to ease the problem.

For instance, many CEOs of mid-market manufacturers are rightly looking for a deep, 360-degree view of their supply chain. This allows you to optimize your own activities and provides options at a time when input costs and staffing issues are major challenges.

• The first key step is to fully understand costs in order to optimize the pricing of your own products and services. With the right systems, it becomes much easier to manage complex purchasing contracts, rebates, and volume discounts — often such discounts are superficially attractive but less viable if your systems can’t support them.
• Solid information is absolutely necessary to underpin this: smart buying requires an accurate and up-to-date view of your own stock and sales forecasts, as well as disciplined internal teamwork.
• Finally, a key consideration is integration with your suppliers. These days it is possible to have deep integration with suppliers so you have accurate, timely information about their activities, progress, and lead-times. This can form the basis for your reporting on their performance in terms of cost, quality, and timeliness.

Most importantly, your own customers and partners increasingly want visibility of this information within your business, and if you can readily provide integration, it can be a point of difference, setting you apart from other potential suppliers of the same products.

Remember, though, that all good systems can go south. For example, if your management information is weak, you won’t see escalating problems until it’s too late, and there is a sudden need to divert materials to fulfill a high-value, lucrative order. This kind of event can create major disruptions and impact other activities and customers for weeks.

Many of these issues are complex to solve. You need the right systems and accurate data, and to use it well you need disciplined, organized staff. Above all you need IT leadership that understands mid-market manufacturing and is a good fit for your company culture.

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