Three Steps to Integrated Supply Chain Management
Modern supply chains involve multiple, independent steps, each of which must operate flawlessly to ensure the efficient movement of freight. Professional companies including manufacturers, distributors, and retailers all achieve this through effective supply chain management efforts. It requires strategic, effective methods.
The biggest problem is this: How do you define ‘effective’?
With multiple cogs in the supply chain management wheel, shippers must find innovative ways of integrating supply management techniques and procedures to reduce mistakes, dependence on resources, and excessive spending.
One of the best teachers of effective management techniques is Stephen Covey.
In his book, “The 7 Habits of Highly Effective People” Covey states that it typically takes 21 days to create a habit. This philosophy is a living example of the concept of “slow and steady”. The main problem that most supply chain managers have, is not having the patience to develop the right habits. This leads to increased mistakes and sets up an opportunity for failure.
To avoid this, professional supply chain managers integrate the procedures through three specific steps.
Strategic Supply Chain Management
Before you ship – you’ve got to build the platform. This is the fundamental concept of strategic management.
This level develops the building-blocks, such as picking supply chain partners, vendors, and carriers. It also includes finding the right warehousing options, establishing shipping and receiving expectations, goals, and objectives. Strategic planning often involves the input of key leaders and stakeholders – at least, if the company wants to achieve supply chain dominance.
Tactical Supply Chain Management
Once the platform and strategic side has been developed, it’s time to get tactical.
In this step, the shipper will begin to build the team that helps them move products from point A to point B. This includes hiring employees, setting up shipping hours and commitment levels, developing schedules for receiving raw supplies, manufacturing, or selling products.
Most importantly, the tactical supply chain management process reviews the entire program to ensure they are meeting or exceeding customer’s demands. This usually takes the form of something similar to beta testing the processes before enacted them publicly.
The final phase of supply chain management is activation. This is when a retailer, manufacturer, distributor, or anyone requiring shipping puts substance behind the planning.
Activation makes all the difference in solidifying logistics. During this phase, supply chain managers will create controls and procedures that allow them to schedule shipments, follow up with customers, and ensure all supply chain functions are handled effectively.
Why Communication is Crucial
Everybody understands the value of ‘staying in your lane’. But, communication with other stakeholders or leaders is just as critical.
Most integrated supply chain management programs fail due to a lack of clear and transparent communication. There are so many moving parts in each phase of supply chain management, which increases the need for all segments to communicate with each other.
For example, when a company is focusing on the strategic side, and are picking a warehouse to host their business, they need to consider the tactical and activation side as well. If they select a warehouse that is large enough to hold all supplies or complete the manufacturing of products, it’s also important to pick one that has enough loading docks. It’s also crucial to verify that the warehouse is employee-friendly, with the right support systems including AC, clean water and bathrooms that ensure your people are taken care of.
These are, of course, just a couple of examples of things that should not be overlooked. And the best way to achieve that is through solid and clear communication.
How a Third-Party Logistics Can Help with Supply Chain Management
The modern-day 3PL understands the concept of integrated supply chain management and can create a plan that ensures the complete supply chain operation is as efficient as possible. Redwood Logistics has helped new and existing companies who have a need for moving or receiving freight optimize their network for several years.
If you manage a business and would like to activate an integrated supply chain management program, reach out to Redwood Logistics today!