How to Create a Successful Supply Chain Strategy


An efficient and effective supply chain management strategy sets successful businesses apart from their competitors. It may seem overwhelming but creating a successful supply chain is possible with research, technology, and practice.

What is Supply Chain Management? And Why Is It Important?

Supply chain management moves products from their source to distributors for manufacturing and eventually the final customer. The overall management of all the links incorporated in producing and transporting goods and services is crucial. A supply chain management strategy is significant in product customization, quality control, cost reductions, and speed-to-market.

Implementing and following a smart supply chain management strategy is more important than ever. The Global Supply Chain Pressure Index (GSCPI) has increased exponentially since the start of the pandemic in 2020. The GSCPI uses big data to measure backlogs, delays, delivery times, and more to determine how healthy the global supply chain is. Since instability on the worldwide level is inevitable, planning and controlling your individual business’s supply chain operations is crucial.

Logistics Management vs. Supply Chain Management

Shippers often confuse “logistics management” and “supply chain management.” Supply chain management is the overarching umbrella that directs activities such as logistics and distribution. Every function falls under supply chain management, from planning to delivering and returning. Logistics management involves only moving and storing products.

Your business’s logistics and supply chain management strategies will be different, but they go hand-in-hand. Therefore, to have a successful supply chain strategy, you also need a successful logistics strategy and vice versa.

Best Practices for Supply Chain Management Strategies

A solid supply chain management strategy should clearly define objectives across all supply chain stages to maximize value. Your supply chain management strategy will be influenced by the industry you compete in, business value propositions, internal decision-making, and overall business goals. As a result, any business can apply a few best practices to its supply chain management strategy to improve its bottom line.

Align Supply Chain Responsibilities

In many companies, decision-making power is divided, which slows down operations. When this power is divided among so many people, everyone loses control of the supply chain, and a high amount of communication is needed to make any decision quickly and accurately. While dividing power in an organization has its benefits, communication is often absent.

Executive management, like the CFO, should oversee supply chain decisions to advance communications. CFOs have the potential to influence decisions since they are in a corporate-level position heavily; they should be the most knowledgeable of the entire supply chain. In addition, executive leadership involved in the supply chain can help consolidate the power division that slows down decision-making.

Collaborate Internally and Externally

Internally, everyone in your organization should be on the same page and focused on the same goals. Cohesion amongst employees in any department is crucial. With so many moving parts and linking activities in a supply chain, internal collaboration is even more critical.

External collaboration is also key to success. Having a trustworthy supply chain partner proves invaluable. Often, companies share technology and information when their supply chains are dependent on one another. For example, a manufacturer may implement a formal supplier management strategy to better collaborate with their supplier. In this way, both businesses benefit.

Take Full Advantage of Technology

The right technology will speed up supply chain operations and maximize efficiency. Find software that’s right for your company and has critical features for your business. One of the main benefits of adequately implementing advanced technology into your supply chain strategy is end-to-end supply chain visibility. A Transportation management system (TMS), for example, assists in booking, tracking, and invoicing freight shipments. Technology such as a TMS allows you to see your operations processes, identify inefficiencies, and implement changes efficiently.

Put Value Over Price

Providing a valuable service, rather than cutting costs at every point of the supply chain, will be better for long-term business goals. Choosing the cheapest supplier and procurement options may be tempting, but it’s not the best strategy. Massive corporations such as Amazon and Walmart have obtained economies of scale and mass production’s economic cost advantage. Therefore, it’s impossible to compete for the lowest cost. Providing a quality product or service will attract and maintain customers more effectively.

It may not be easy to get company leadership on board with this idea, but putting value over price will satisfy your customers, keep business flowing smoothly, and make you a reliable supply chain partner. Producing quality products and services is the best way to build brand recognition and respect amongst customers and potential business partners. The value-added will trump the initial cost savings in the long run.

Take “Green” Initiatives Seriously

Consumers consider environmental impact when purchasing goods. No matter what industry you are in, operating a sustainable supply chain will not go unnoticed. A 2019 study showed that 47 percent of consumers had switched products due to social values. Implementing green logistics into your business’s supply chain strategy will please your customers, create a positive brand image, and boost company morale.

Obtaining awards and joining programs promoting sustainable business operations proves to customers that your business takes environmental concerns seriously and is not greenwashing. For example, shippers, carriers, and 3PLs can join a program sponsored by the EPA called the SmartWay Partnership. PLS Logistics is a member of this program and has significantly reduced shippers’ and carriers’ carbon footprints while saving them money.

How a 3PL Can Improve Your Supply Chain

If your supply chain operations are becoming too overwhelming to handle in-house, outsourcing may be the right option. Outsourcing your supply chain needs to a 3PL can save your organization time and money. In addition, having an expert business partner to assist with logistics and transportation functions allows you to focus on what matters most to your business. So, get a quote today from PLS Logistics!

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