Examining Key Components of an Effective Supply Chain Optimization Strategy

Analyzing Your Network Strategically Is A Good Idea

As you know, there is plenty that goes into supply chain planning. You have to have a very deep understanding of your supply chain to move forward with optimizing your supply chain. One good thing to do is to conduct a strategic review of the network for your supply chain. This helps you examine many metrics such as warehousing costs, distribution networks, labor and transportation, and more. These metrics can help inform your view of your supply chain planning and hopefully assist you in identifying any ways to make your supply chain more efficient.

Strategic Planning Is A Sensible Starting Point

Strategic planning is important for your overall supply chain planning in that it defines the general approach the company will take to achieve its goals. You set goals for distribution, production, inventory management, and transportation in this step and you also align these goals with both customer service and technology. You can take a look at the structures within the organization in addition to any areas that you can invest in at this point. You should predict customer demand as part of the strategic planning so that resource allocation can be as efficient as possible.

Tactical Planning Is Another Part of the Process

Strategic planning is good for identifying your long-term strategy, but tactical planning is necessary to make this long-term strategy work. It is best if the tactical plan covers at least one if not two years to provide the required support for the long-term strategy and the tactical plan does so via resource allocation. This resource allocation also includes allocating the company’s workforce. Certain necessary skills, requirements for capital, and the timing for every single step should be part of the tactical plan, too. You might need outside resources to optimize your supply chain, so the tactical plan should come with provisions for those outside resources.

Operational Planning Integrates the Strategy into Everyday Activities

Operational planning is necessary because it takes your overall supply chain optimization strategy and turns it into part of the day-to-day operations like programs, policies, and plans. One part of operational planning is allocating resources effectively. Another part of it is allocating performance measurements effectively. Together, effective allocation of performance measurements and resource allocation makes the company operate more efficiently. Monthly, weekly, or even daily activities may be part of operational planning, so that it is possible to organize and keep an eye on the everyday routine of running your business.

Contingency Planning Helps You Prepare for the Worst

Part of optimizing your supply chain properly is always preparing for the worst-case scenarios. Some such scenarios include labor issues, severe weather, and losing a crucial vendor or supplier. These are just a few examples of worst-case scenarios and your contingency plans should encompass any event or set of circumstances that could seriously impact your organization. Contingency plans help you decrease how long it takes you to respond because you’ve already planned out how to respond to worst-case scenarios. One more aim of contingency planning is to limit internal disturbances and decrease how much trouble worst-case scenarios cause for your customers.

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