3 M's to Cut Supply Chain Costs
As the global supply chain settles into the COVID-19 technology-driven and customer-centric decade, there's no time to pause and reflect on what has happened. Now is a time for action. Pick up the pace and ensure your processes are leaner and faster, and you are equipped to meet your customers' expectations.
The three M's—measure, manage, and maximize—are key areas to explore to realize your company's full potential and get the biggest, fastest savings in your supply chain today.
1. Measure. Measuring is all about understanding how your supply chain functions. To measure your supply chain is to create an overview of your operations and, within that, to understand key processes and where your company's strengths and weaknesses lie.
Creating an overview of your supply chain is the first step in measuring what your company is doing right now and what your current process looks like. Turn that information into actionable items that your company can use to make better business decisions.
Measuring can help you:
- Analyze the need for process improvements.
- Understand where cargo can be consolidated to increase cost savings.
- Measure carrier cost structures to maximize efficiencies and lower costs.
- Achieve better financial efficiency in your supply chain network.
- Enhance control over shipment scheduling.
2. Manage. Managing is all about the internal conversation in your organization and understanding the flow of goods, money, and information. It's about understanding why key stakeholders—vendors, purchasing, customer service, and sales—make the decisions they do and how those decisions affect your supply chain.
The data and analytics gathered during the measure phase can create the insight necessary to understand why these decisions are being made and how you can improve them.
The manage phase has four key advantages:
- Visibility across the entire supply chain, from sourcing raw materials to delivering finished goods.
- Modeling future supply chain scenarios as your company grows/changes to ensure speed to market while maximizing cost structures.
- Complete insight into production, partner, and supplier performance to ensure responsiveness to customer needs.
- A global perspective to stay updated on the latest developments and optimize processes across North America.
3. Maximize. Maximizing is making the most possible good out of every factor and decision within your organization. For example, technology helps maximize efficiency and, in turn, increase profitability.
The other two M's are crucial in maximizing, as they help you understand the organization's layout and what steps to take to see the most benefits, whether it's further developing strengths or optimizing a specific aspect of the operation.
A well-managed supply chain provides the ability to execute best practices in demand planning, procurement, logistics, inventory management, information systems, compliance, distribution, and risk management.
Put it into Action
During periods of uncertainty, dedicating time, energy, and money to anything that doesn't have an immediate apparent return can be terrifying. But taking that first step is most important, as it lays the path toward improvement and growth in the future.