Supply Chain Planning: The Best Strategies and Practices
By 2018, Amazon was already responsible for just under half of the nation’s e-commerce sales and five percent of all combined offline and online sales. This outrageous success, referred to as the “Amazon effect,” represents more than just one company’s savvy business model—it also represents a massive disruption to supply chain management. Companies that want to remain competitive must be as successful as Amazon at getting the customer what they want when they want it. The key to remaining relevant is building an efficient supply chain strategy. Following supply chain planning best practices is critical to meeting customer demand.
What is Supply Chain Planning?
Supply chain planning (SCP) is the process of coordinating the delivery of goods, services or information, along the entire pipeline from supplier to customer. In essence, supply chain planning is about meeting customer demand. And meeting that demand requires a coordinated effort from all key players to ensure an efficient and seamless experience for the customer.
Effective supply chain planning provides a personalized and seamless omnichannel experience for all customers while realizing the most profit to the company. To accomplish this, companies need to connect the customer’s digital journey with the physical supply chain to deliver this type of seamless experience.
Everyone involved in fulfilling customer demands, from retailers to distributors to manufacturers, needs to be agile and responsive in meeting those needs. They also need to be resilient in the face of disruptions to the process. Considering how interconnected the supply chain is, everyone must work in tandem for a successful delivery.
Supply Chain Planning Best Practices
Supplying too much or too few of a product can shock your supply chain and quake through the entire business. Supplying too much stock forces companies to hold inventory of a product that isn’t moving. Too little stock affects customer satisfaction, which could reduce revenue as customers head to competitors. Here are a few best practices to help avoid some of these issues.
Work on Better Demand Forecasting
Demand forecasting can help avoid these problems by helping you predict future sales based on analysis of historical sales data. This type of approach is critical to making informed decisions for optimizing inventory. While your forecasting won’t be 100% on the nose every time, there are a few steps you can take to improve your accuracy:
- Set a clear objective for each product. Have a clear purpose for how much you produce, and when you expect customers to purchase that item.
- Collect and integrate data from all of your sales channels. This will give you a comprehensive view of the product’s historical demand.
- Analyze the data to identify repeatable patterns in customer demand.
Have Supply Chain Metrics—And Monitor Them
Your company should establish clear supply chain metrics that you can track. Knowing and following these key performance indicators (KPIs) that help you analyze strengths and inefficiencies in your supply chain strategy. Using this information helps you further optimize links in the chain that are performing well and address areas that may need improvement. Monitor KPIs such as your:
- Perfect order rate—this is your ability to deliver error-free orders
- Warehousing costs—track all costs associated with warehousing, including labor, rent, utilities and equipment
- An inventory-to-sales ratio helps avoid over-or under-stocking items by comparing inventory available for sale against how much is sold
- Inventory velocity data helps companies optimize inventory by determining how quickly items need to be restocked
- Knowing the supply chain cycle time helps determine the efficiency of the process by indicating how long it takes to fulfill an order
Learn to Mitigate Risks
Considering the sheer number of moving parts involved, supply chains are inherently full of risk. It is important to identify these risks and plan accordingly. Failing to address these risks could impact your entire process and ultimately impact revenue. You need to consider elements like demand and supply, obviously. Plan for what to do when you miscalculate demand or if supplies don't arrive on time.
Understand that it’s not just internal factors that can get in the way, especially when shipping worldwide. Plan for complications that arise as a result of social-economic, political or environmental issues. Likewise, if any one component of the manufacturing process is disrupted, the whole chain can be thrown off track. Unforeseen disruptions to personnel, management or other essential business processes can also send operations careening. Have a plan in place to mitigate these concerns as much as possible.
Leverage The Use of Cloud Sales Solutions
When it comes to meeting customer demand, efficiency is key. Leveraging cloud technology for sales and other key areas of your business helps you achieve the efficiency you need.
Cloud-based technology integrates all of your key business processes into a single platform, which employees can access from any internet-connected device. This means every employee has the information needed to deliver a seamless customer experience regardless of where the customer is in their journey.
Many companies are shifting to cloud-based systems, which means your suppliers are likely also using cloud technology. Leveraging cloud solutions means you’ll be able to integrate with your suppliers’ systems to get accurate information on product availability. These system integrations are also helpful because they automate ordering from your suppliers, based on sales data in your systems. Use technology to realize efficiencies in your processes!
Bring Cloud Sales Presentations to Your Team With Ingage
The ability to meet customer demand involves more than simply having the right product in stock. It requires a strategy that provides a seamless omnichannel experience for the customer. This guarantees that they’ll get the right product when they want it while giving you the best chance of profitability.
Of course, your supply chain starts with a steady stream of sales. Ingage is a cloud-based presentation software that can help you close more deals and make more sales. The feature-rich suite of interactive tools empowers your team to build highly-engaging presentations that get you results. The cloud-based interface, collaborative features and highly detailed analytic data ensure that everyone on the team can keep up to date. Reach out today to see how Ingage can transform your sales presentations and start your supply chain with a solid foundation.