How to SuperchargeYour Supply Chain

Introduction

Set goals

Customer service

Benchmarkyour performance

As new technologies continue to transform how we work, standing still is equivalent to moving backwards. The supply chain is understood to be a driver ofcompetitive advantage – companies with exceptional supply chains are recognised as world leadingbusinesses, and vice versa.

In a brave new world where the pace of change

can sometimes feel overwhelming, how can you

supercharge your supply chain while delivering cost

efficiencies? While there’s no silver bullet, we outline

some of the essential improvements and advances

you can make to transform your supply chain, from

basic steps to major programmes.

Customer service should be at the heart of themission of every supply chain – it’s the basis of repeat business. Excellent customer service equals customerloyalty – and that depends on how well your supply chain performs. To supercharge your supply chain, you need to think about how easy (or difficult) it is to achieve the perfect order – the order that is: Before you launch into creating a roadmap for

improvement, it’s well worth taking the time tobenchmark your supply chain against yourcompetitors, other sectors and best-in-classperformers. Assessing what supply chain successlooks like for others will give you a fullerunderstanding of your performance and where you need to make the most headway. We’ve alreadyreinforced that customer service is key: pay mostattention to customer satisfaction, remembering that it’s much more cost effective to keep existing clients happy than it is to win new ones.

Once you have a clearer picture of where your supply chain needs strengthening, prioritise the links most urgently in need of attention. Be sure to get to the root cause of why each specific weakness exists before you devise and implement a solution to optimise yourprocesses, and pay as much attention to why you’ve lost some customers as to why others have stayed – this is how you’ll identify the gaps in your supplychain’s performance.

When you’re embarking on any improvementinitiative, goal setting is essential. Defining youraims from the very start will propel performance, focusing your team and encouraging their effort while helping to prioritise the tasks that will optimise your supply chain.

Ensuring that each order is error-free requires asequence of actions to take place, from capturing the customer’s order accurately and forecasting availability to picking the order correctly, without damaging the product, within a timeframe that will help to meet the customer’s required delivery date. Only once theproduct has been transported on time, in full, can the transaction be concluded through receipt of payment, which means not only a non-defective delivery, but the correct paperwork being present. Identifying andunderstanding the weak links in your supply chain isthe starting point for reinvigorating it.

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Delivered to the right place

With the right product

At the right time

In the right condition

In the right package

In the right quantity

With the right documentation

To the right customer

With the correct invoice

Understand what’snot working

Measure improvement

At this point, your stakeholders can assist withvaluable feedback. The next step is to think about whether you need to re-engineer your networkdesign to minimise the amount of product handling taking place, as this is where you can make the most gains. Optimising your network might be a long-termproject, but developing a supply chain roadmap to support your business strategy and breaking itdown into manageable chunks will set you in theright direction.

Having carried out your benchmarking exercise, there are certain signs that you should recognise as triggers to take action – these are problems that will have a knock-on effect on your entire supply chain.Ask yourself the following questions:

Set continuous improvement objectives for smallincremental gains, keeping in mind the bigpicture – total spend. This way, you can measureyour impact and demonstrate ROI.

Look at cost, dependability, speed, flexibility andquality – if you don’t already have performance metrics in place, set some clear and specific measures and agree how often you’ll assess performance, and whoseresponsibility it will be so that you can track progress. For instance, you might choose to assess thepercentage of orders received correctly fromsuppliers during a set period of time.

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Do we have too many stocklocations? Are we too weddedto having offices and warehousesin the same (not necessarily the best) place?

Is double/multiple handling taking place that could be avoided?

Are our distribution costs too high?

Are we using our distributioncentres as well as we could be?

Is our customer servicegood enough?

Streamlineyour processes

Leveragetechnology

Review legacy systems

Encouragegood communication

As streamlining is such an intrinsic part of supply chain management, the pressure is always on to find better, more efficient, more cost-effective ways of working. It’s fair to say that how well a supply chain performs can make the difference between a business that succeeds and one that fails. Here are some of the key areas to look at as you decide how to hone your processes to deliver a robust and agile supply chain.

Technology has transformed the supply chain almost beyond recognition, and to supercharge any supply chain, digitisation has to be a priority. According to Gartner Predicts 2018: Future of Supply ChainOperations, supply chain management is on its way to becoming technology-centric as opposed to simply technology enabled. Automation can help remove room for error, as wellas freeing up your team from dull, predictable andrepetitive tasks through the use of artificialintelligence (AI). Whether it’s improving warehouseefficiency or automating the generation and sharing of invoices between supplier and purchaser,technology can help to hone your processes and seamlessly speed up your operations. Once you start using technology to bring yoursystems together, you can look forward to reduced warehousing costs, better inventory management and quicker shipping and delivery, not to mention happier customers. Here are just some of the technologies that can help to supercharge your supply chain. If you’re not already using them, refer back to your diagnostic exercise and assess which of your weak links can be strengthened through the application of technology.

Is crossover between the supply chain and legacy systems creating information silos within different departments? Perhaps simple daily tasks are being duplicated unwittingly, wasting time and creating unnecessarily complicated processes. Can youunlock hitherto untapped potential within yourlegacy systems – or do you need to initiate a completeoverhaul of your systems and upgrade to newtechnology?

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Good communication might seem like something of a soft goal, but breaking down internal barriers will help to ensure that work isn’t duplicated across different departments, giving you greater insight as well as making for happier teams. Time spent on improving cross-functional relationships will also help to smooth through necessary changes as you continue to evolve your supply chain.

Look at how easy (or difficult) it is for your teams to have visibility across the business, and whetherexisting communication channels help or hinder. Consider when and where communications habitually fall down and assess whether you can improve current processes or need to implement new tech to facilitate the smooth flow of communications in real time.

Use real-time data

Supplier portal

‘Track and trace’ solutionsAccording to the 2018 Digital Supply Chain Executive Survey, both retailers (57%) and manufacturers (50%) include real-time product visibility as a top driver of investment. Retailers express the need for end-to-end traceability (53%) with the ability to manage newfulfilment nodes (50%), where manufacturers aredriven by the need to innovate faster (40%), with lower cost to serve (33%) through improved planning.

Information technology and digital analytics can be used to track supplies and identify blockages in the pipeline – make sure that you’re using real-time data and spend analytics so that you can see exactly what’s happening before and after sourcing, and improve supplier selection, market analysis and supplierperformance. This not only reduces risk, but helpsyou to build strong connections.

According to The Global Chief ProcurementOfficer Survey 2018 from Deloitte, supply chaintransparency is poor, with 65% of procurementleaders having limited or no visibility beyond theirtier 1 suppliers. A SAP-certified supplier portal cansimplify your supply chain by bringing purchase ordermanagement, quotation requests, demandforecasting, quality notifications and supplier KPIvisibility within a single platform, maintaining SAPas the single stack.

A portal will simplify your supply chain, increaseefficiency and reduce cost, as well as making lifeeasier for your suppliers by simplifying interactions with you and your purchasing team. With all previous tasks located within a single portal, the time spent byinternal teams on administrative tasks can besignificantly reduced, while supplier collaborationis improved.

Going back to some of the features of the perfectorder – right product, right quantity, right package, right time, right place – are you monitoring every stage of the inventory process? By using track and trace to tackle the issue of supply-chain visibility, you can follow each unique purchase order number, container number(s) and item counts, weight, status, delivery date and more. Integrating all this information with your accounting systems means that yourinventories will always be up to date, no matter what stage they’re at, giving you a clear picture in real time.

Of course, track and trace is nothing new – systems have been in use for the last couple of decades. So, if you don’t already have end-to-end processvisibility – why not? Traceability will improve yoursupply chain and reduce costs by avoiding the need for firefighting, while improving the customerexperience thanks to the use of data to underpincompliance and sustainability, and enhancingcustomer service through real-time updates.

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50%Manufacturers

57%Retailers

Include real-timeproduct visibility as atop driver of investment.

Enterprise ResourcePlanning (ERP) software

The Internet of Things

Thanks to the intelligence, visibility and analytics offered by an ERP system, it can provide real-time assessments of future business performance to assist you with managing procurement efficiently. The instant visibility provided gives you the ability to make live data-driven decisions using the flow of real-time information across the business to establish and change supply chain limits.

An ERP system will also make it easier for you to assess suppliers, assisting you with continual monitoring and giving you a head start when it comes to selecting suppliers and negotiating new contracts. Following this through to a logical conclusion, a supplier portal that sits within your ERP stack will give you everything you need to get the best out of your suppliers.

When you’re managing multiple software platforms, how can you break down the walls between software applications? Replacing legacy software orintegrating ERP apps by introducing an ERP system can give your supply chain a fundamental boost. ERP software will bring your business’s core processes into a single system – combining everything fromprocurement and supply chain to services,manufacturing, finance and HR.

The Internet of Things (IoT) – whereby computingdevices embedded in everyday objects enable themto send and receive data – has been a gamechanger for track and trace, providing real-timevisibility of a product’s progress from manufacture to delivery. Thanks to IoT technology, tracking yoursupply chain is easier, far quicker and it’s also much easier to catch any issues early. But the applicationsof the IoT don’t stop there for the supply chain.

While connecting already digital devices is a relatively straightforward task, it’s the non-digital equipment that you may now need to consider. It’s estimated that non-native digital devices in the IoT could outstrip

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Features can include, but aren’t limited to:

Bringing supply chain data into a portal can havea huge impact as you seek to unify all of yourtransactions’ many touchpoints, including making sure that your suppliers are fully aware of yourrequirements of them as an ethical partner.

View open ordersand historical data

View alerts and notificationsby text and email

Manage scheduling agreements

Access product detail

Manage ECNs

ASN administration and control

Contract visibility

Access to financial information

Blockchain

Focus on developingsupplier relationships

digital devices two-fold within the next couple ofyears. That means connecting machinery, vehicles,mechanical devices, gauges, sensors and more.

How can you gain end-to-end insights across your processes? In practical terms, products and pallets can be given RFID tags, sensors and counters can provide data from machines and assembly lines and machines can be activated with microchips. It’s all aboutcreating actionable data that can inform yoursupply chain activity.

It might sound obvious, but the more suppliers you have, the larger the task of managing them and the more room there is for confusion. Could you use a single supplier to cover off a number of processes or products? Reducing your number of suppliers will have a positive knock-on effect across your supply chain, shortening the supply chain and resulting in fewer deliveries, less risk and a reduced workload. There are few negatives to this approach, as long as you don’t neglect supply back-up plans.

Bear in mind that reducing your number ofsuppliers is a two-way street. By taking a long-term view of developing stronger relationships with fewer suppliers, you’ll also be in a better position when it comes to negotiating new contracts, as well as reaping

Many companies are already starting to explore the possibilities of blockchain, which can be used to create a high degree of transparency for each link of thesupply chain by recording every transaction securely. With blockchain, there is no room for confusion as it creates a ‘single truth’ via multiple copies of theledger, and cannot be erased. For global organisations, the ability to transfer funds worldwide is another plus.

Blockchain is seen as a gamechanger for supply chain management, not only in terms of documentation processes but for product verification. If you aren’talready exploring the possibilities, make it yourmission to monitor how other businesses areimplementing blockchain, and open the conversation within your business about future experimentation to avoid being left behind.

Your suppliers play a critical role in product availability, so consider whether how you work with them needs simple fine-tuning or a complete overhaul. How are you doing? Do you communicate regularly to build mutual trust? Do you encourage loyalty by agreeing ongoing orders and allowing for genuine mistakes? Are you perhaps over-reliant on a single supplier, ordo you have too many to keep track of easily?

the rewards of greater supplier loyalty. A supplierportal can be an invaluable tool in making surethat you get added value from the optimal numberof suppliers while communicating clearly withthem and enhancing the relationship (see alsoLeverage Technology).

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Suppliers

Compliance andyour suppliers

Invest in personaldevelopment

Don’t just think about your own corporate conduct: how are you tracking the business practices of your suppliers? Do they understand the implications of non-compliance? If you needed to produce evidence that they not only meet legal requirements but your own ethical stance, could you? Improving supplierprocesses via a supplier portal can play a role indelivering greater transparency and putting the onus on the supplier to achieve full compliance withlegislation and your business’s best-practice standards.

Bear in mind that securities fraud litigation, once a phenomenon limited to the United States, is now becoming more frequent in Europe. Here, a group of shareholders will sue a company for damages, based on having invested due to misleading or fraudulent information – this can include inadvertent support of illegal activity. Litigation funding companies in Europe are now prepared to back shareholder groups with a good claim on a ‘no win, no fee’ basis. This is yetanother good reason to not just ‘do things right,’ but to ‘do the right thing.’

With so many pressures to deliver efficiencies through the supply chain, it’s easy to forget that the ability to do your job well requires a certain amount ofprofessional self-care.

While it might seem like a luxury to find the time for continuing professional development and attending industry events, creating opportunities to stimulate discussion outside of your business can deliver some much-needed inspiration from your peers. A sensible approach is to stay connected with your network, who will be experiencing similar challenges and can act as a sounding board.

Think about whether you should update yourqualifications, and encourage your team to do the same. Not only will this bring you into contact with a new group of peers, but it will provide the chance to gain new knowledge – especially relevant as new and disruptive technology such as blockchain drives digital transformation within supply chain management.

Of course, improving your supply chain isn’t justdependent on changing the behaviour of yoursuppliers. How your own team performs can make a significant difference, so look to make the most of each individual to strengthen the supply chainmanagement function.

A strong corporate reputation is hard to earn andeasy to lose, so review how deeply corporate socialresponsibility (CSR) is currently embedded in your supply chain and identify any risks. While you may feel that this doesn’t deliver any direct efficiencies, the critical factor here is the negative impact the supply chain could have on your business’s reputation – and therefore profitability – should you fail to adhere to best practice.

Taking proactive steps to prevent the unintentional support of human trafficking, forced labour, child labour, or other human rights abuses is essential by following due diligence and installing complianceprogrammes. Be sure that your whole team is awareof the current statutes and regulations in everycountry along your supply chain. Be very wary, too, of ignoring nonbinding standards and proposed legislation that could come back to bite you later.

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Professionalcompetency

CSR and Ethics

A static approach to maintaining your supply chain will fail to deliver competitive advantage for your business. While some improvement measurements will require significantinvestment and planning, committing tosupercharging your supply chain can open up opportunities for quick wins, too – working smarter and releasing the capabilities that your current systems and people already have.

While there are many, many measuresthat can make a difference to how yoursupply chain performs, they all begin with a willingness to take an honest look at your starting point. Only by critically assessing your current operations can you start to develop your supply chain roadmap, looking at cost versus value as you identify the best solutions for your challenges. By combining smallincremental gains with major programmes, you will get the best of both worlds – and your customers and suppliers will noticethe difference.

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In Summary

Insights from

Realising ROI from SAP Supplier Portals:12 Process Improvements

For more insights, download our supply chain insight report

To find out more about supplier portals, contact us for a demo

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