It’s said of chains that they are as strong as their weakest link. In the case of a supply chain, besides being of a certain length which in itself could be an area of concern, its very form engenders one thing – plenty of links which by themselves weaken things.
That said, the art of extracting the very best from any supply chain is to give every link its intended flexibility which helps the chain accomplish its objectives. These days seasoned professionals in the line have, among others, started the use of the following to help them serve their clients better:
– Use stops wisely instead of keeping very long and unwieldy chains so that equipment, especially vehicles do not get over-used, and lives are put in danger
– Where there are stops, use these wisely to either unload cargo or keep it on the carrier
– Use technology like RFID, scanning, bar-coding and the likes to continually track both, cargo and carrier to increase efficiency.
– Use IoT-enabled devices to interact with each other to reduce human intervention which could be related to tracking, tracing and documenting the same. These result in saving time and efforts and help increase efficiency.
– Use smart-contract based block-chain systems to generate documents which represent receipt, ownership and contracts like LRs, Warehousing receipts, Bills of Lading and Airway bills. These ensure quick, defect-free document generation (sometimes without the need for physical documents at any points) and compliances with a very less human intervention which help increase efficiency and reduce costs.
The use of the above technologies and initiatives help supply chains increase their value in business AND as a business in the following ways:
– They provide clarity
Supply chains by their very nature lead to a level of opacity which develops due to inadvertent gaps and overlaps in activities. These if not addressed in time lead to large “black holes” where information does go in but never comes out as desired. For such eventualities, there’s nothing better than technologies which provide information by their very nature (like RFID tags). For any business whose existence is completely dependent on supply chains, like for instance e-Commerce companies, enhanced clarity can mean the difference between a winner and “also-ran”. The world of e-commerce companies is thus full of stories of entities which got into the domain but could not sustain in the absence of clarity on their supply chain activity.
– They provide speed
Taking the example of the eCommerce entity as before, a supply chain which is equipped to function as desired will afford speed to the organization to accomplish its stated objectives. With competition being cut-throat these days, a supply chain which either does not have the required speed or cannot guarantee the same when most needed is an outright loser. Another example of this is the supply-chain service which is needed to provide for an automotive manufacturer’s production line. With OEMs set up all over the place, the best supply-chain provider is the one which while picking up all the required parts, does so in the minimum number of trips, thus saving on time and money. A supply chain solution which increases or maintains required speed helps keep the production-line running which has a direct bearing on output, sales and quicker turn-around of monies.
– They provide higher efficiency
A well-oiled supply chain solution provides the end-business with higher efficiency of production and output. Taking the example of the automotive manufacturer, where the latter gets parts well in time, more vehicles can be produced in the same period resulting in higher sales and quicker turn-around of monies stuck in the form of raw material. With the multiplier effect kicking in, an organization makes more money at the same time!
– It reduces wastage
Efficiently crafted and operated supply chains in fields including perishables like food-stuffs, flowers and decorations, and non-perishables like fashion clothes can help move raw materials into production, and final products into shops and sales efficiently with the minimum being wasted. Minimized wastage means two things: higher sales and/ or lesser usage of raw materials. In either case, both lead to higher income.
– They provide certainty to action
Supply chain solutions that are known for their certainty provide a measure of stability to organizations. When you know what to expect at every stage, planning becomes easier to accomplish which reflects directly in every aspect of the working of an organization. Supply chain solutions are especially of importance as they go on to make or mar the very reason an organization exists which could be either production and manufacturing, or even the movement of other people’s goods.
– Issues like penalties and incentives become automated, systematized and error-free
The concept of 4 PL is no more a novelty. What is, are issues like penalties and incentives being automated which means mistakes become very costly with no recourse under any circumstance. An efficient supply chain will try its best to keep mistakes low to lower penalties and fines, and on the contrary, increase income where there’s a scope to earn incentives.
– Gives the users a thought-leader position
Businesses with efficient supply chain solutions that continue to perform well become thought leaders in the eyes of everyone from the competition, the industry and the world in general which leads to increased goodwill and higher valuations.