How to increase your Supply Chain Velocity?
Supply Chain Velocity can be defined as the capability of the firm, both internally and in conjunction with its key suppliers and customers, to adapt or respond in a speedy manner to marketplace changes as well as to potential and actual disruptions, contributing to the agility of the extended supply chain.
With the increasing pressure from markets, companies now need to accomplish greater results with fewer resources in less time. While honesty, integrity, timeliness and quality are still the basic pillars for any business, some principles can be outlined for accelerating Supply Chain Velocity.
1. Besides the unit price of materials and services, also consider factors such as the proximity of a provider to key locations, quality assurance processes, demonstrated past performance, contracted performance penalties, consistency of quality or reject rates, provisions for turnaround times, expediting fees and service-level standards. This will give you the benefit of total value instead of unit price.
2. When deciding to replace or enhance systems, instead of large and time taking implementations opt for quick-hit projects or low-hanging fruit. For larger projects, follow a plan which allows increment step by step instead of trying to do everything at once.
3. Increase Fulfillment Flexibility and Reduce Cycle Times by establishing fulfillment operations that are flexible and adaptable to meet changing market demands.
4. Manage your inventory wisely because stockouts represent lost opportunities, and excess inventory robs capital from productive possibilities.
5. Seek Out Smaller or Niche Vendors because smaller, lesser known suppliers can be more nimble and may be more willing to creatively meet your needs in a short timeframe.
These tips, though simple and basic, go a long run in increasing supply chain velocity, if followed and put into effect religiously.
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