Ten Unique Characteristics of the Best Supply Chains

Abstract
A supply chain is essentially a network incorporating elements such as facilities, distribution alternatives and individuals working primarily towards procuring and transforming products in order to deliver and distribute them among prospective buyers. One may regard it as an artery which gives industrial life to a company or enterprise. Supply chain disruptions cause companies to falter and even, in the worst case, eventually shut down (Exforsys, 2010).
“Excellence” is a word employed to denote the trait of being tremendously good at doing a given task. The briefest scrutiny into what supply chain excellence implies will probably lead one to the following conclusion: excellence is delivery of the right goods, in the appropriate quantity, at minimal prices, to suitable clients at the time and place required. But this is undeniably and understandably easier said than done. Although the aforementioned definition is quite precise, the concept, in actual fact, goes deeper, entailing numerous other central facets (Weaver, 2016).
A large number of aspects and stakeholders play a part in supply chain decisions, complicating the achievement of ‘excellent’ supply chain management. The phrase “supply chain” may be used as a short-form to indicate the ten traits (outlined below) which should be aimed for if one aspires to attain supply chain excellence. Every trait has been examined in depth to cover what all supply chains ought to endeavor towards for their continued, system-wide sustenance.
1. An all-encompassing supply chain approach which is supplemented by strong leaders
Strategic Planning Helps Enhance Efficacy
Networks are interlinked systems reliant on each other (Exforsys, 2010). They have unique linkages and their inter-reliance means that it is vital to have strategic planning in place for supply chains. It is imperative to devise and launch detailed plans which enable the unique supply chain associations to thrive and remain in harmony constantly (Exforsys, 2010).
Strategic Planning Brings About Economic Improvements
Speedy completion of tasks forms one of the components of a supply chain’s functions. However, no matter how fast one delivers one’s products to end consumers, speed doesn’t accord strategic edge to companies if supply costs are high (Exforsys, 2010). Affordability is pivotal.
In fact, the elements of price and speed ought to work together within supply chain networks for ensuring companies enjoy a strategic edge over competition. Instead of addressing where, when and how to achieve swiftest supply, one needs to examine where, when and how to achieve the swiftest supply at the most reasonable rates. Strategic planners should effectively integrate this into their planning (Exforsys, 2010). Even if suppliers successfully achieve speedy supply, is the cost reasonable? Concurrently, if suppliers successfully acquire supplies at economical prices, is the speed justifiable? The two primary questions posed above may impact strategic planning.
Strategic Planning Helps Improve Expectation
A second aspect which facilitates improvements in supply chains and accords strategic edge to firms is: identifying and forging a business relationship with producers or outsourcing of production to producers capable of transforming delivered products (delivered swiftly and at an economical price) into partially or completely finished goods.
Companies capable of effectively converting an economically-priced, speedily-delivered supply into finished goods ought to incorporate internal production into their strategic plans (Exforsys, 2010). But if one discovers chances of the above activity being better performed by another firm (at a potentially more economical rate), outsourcing will become the sensible way of doing business. Strategic corporate planning facilitates improvement of organizational expectation. The company will be able to determine parties who can perform the activity in a better and more economical way, and not suffer regrets in the future.
Strategic Planning Helps Improve Evolution
Strategic planners are required to envision the impact of lifestyle trends and evolutions on delivery of products. Earlier, innumerable working-class people had a five-day work-week of forty work hours (Exforsys, 2010). In the present era, the case is different. While several individuals continue to work the same number of hours, their locations and shifts differ. Round-the-clock outfits evolved, taking into account the above shifts in lifestyle trends. The early round-the-clock grocery stores gave way to high-end shops, entertainment arcades, gymnasiums, and innumerable other sectors.
Leadership
Sound leadership has a crucial role to play in ensuring excellence in an organization’s supply chain. Supply chain leadership is required to grasp and shape overall corporate objectives, communicating the significance of accomplishing those objectives to members of the product’s supply chain (Weaver, 2016). Thus, there is a need for team development capability and sound communication skills. Additionally, leaders ought to be frank, and the absence of a chairperson at C-suite supply chain meetings should spur them to readily invest in somebody else the authority to chair. Ultimately, supply chain leadership is responsible for ensuring supply chain activities aren’t perceived as mere cost management components; rather, they should be incorporated into organizations’ value creation-focused strategic planning (Weaver, 2016).
1. Attention to financial metrics
It is essential to shift from the conventional return-on-assets outlook and accept novel supply chain excellence definitions. Moreover, corporations must revert to fundamental financial metrics, renewing focus on supply chain process optimization (Mayer, 2013). For guaranteeing efficient system management, return on invested capital, inventory turns, customer service, operating margin, income, prediction precision and other such measures must be concurrently managed in the form of a nonlinear cross-disciplinary system (Cecere, 2014). Functional measures concentrate sharply on dependability with cross-disciplinary alliance on higher-level performance of corporate balance sheet.
1. Dedication to improving processes and innovating
A successful supply chain proves crucial for corporations’ delivery of goods to buyers desiring them. With the constant evolution of the international marketplace, supply chain leaders need to think in a more creative and proactive manner for balancing expenditure and product across product life cycles (Wilbers, 2016).
Supply Chain and Innovation
Innovation has the potential to immensely affect performance of supply chains. Five supply chain elements which may be revolutionized for achieving cost-cutting goals and fulfilling customer requirements are (Klumpp, 2016): Designing for production, assembly, 6-Sigma, environment and product serviceability.
1. Partnership with select parties
Banking on social networking websites, podcasts, industrial events and blogs for acquiring information which aids one in remaining updated on latest trends may afford a strategic edge to firms. Further, the application of social media for developing supplier tutorials or platforms targeted at the interchange of best practices may contribute positively to supplier relationship management. Essentially, making the most of novel technologies which facilitate instantaneous global interpersonal communication is a prudent step for those seeking supply chain excellence (Weaver, 2016).
A strategic partnership entails attempts at cutting costs for every concerned party as well as promoting a deeper understanding between concerned parties, leading to a more effectual and successful supply chain. Advantages are especially apparent in the following domains (Ryu, So & Koo, 2009): specifications and design: Cooperation offers improved insights, ensures operations go smoothly, enhance value and quality, and create value addition alternatives from a cleverer production group.
1. Better strategic sourcing
A number of supply chain/strategic sourcing companies typically find themselves overcome by their allocated tasks, forgetting to take account of the overall goal along the way. This is seen more often among firms in which the workforce identifies itself with individual functions and not with the organization (Morana, 2013). Effective supply chain personnel commonly realize that, in the end, sales and supply chain workers are equally responsible for product sales. That is, cost-cutting isn’t aspired for in order to fulfill a particular functional goal; instead, its aim is improving finished goods’ profitability and competitiveness.
Alignment of objectives with general corporate mission remains crucial to supply chain efficacy. The ideal situation requires supply chains which enjoy an edge over competition to actually strive towards developing corporate mission and vision, instead of merely responding to it (Morana, 2013). For instance, Dell, one of the leading global computer technology companies, established, towards the close of the twentieth-century, an obvious advantage: it streamlined its supply chain/strategic sourcing processes, harnessing its distribution capabilities for providing services to market segments (Yarusso & Sanderson, 2010). Its supply chain achieved a competitive edge which grew to become the organization’s corporate identity.
1. Logistics execution excellence
Organizational capacity of responding to changes, and being inventive and agile, is contingent on their capacity of executing at top levels. Ongoing improvements, lean practices, proven template and profound expertise are a few supply chain management aspects which need to unite in order for achieving outstanding logistical execution (Weaver, 2016).
1. Planning and receptiveness skills
Organizations having better planning capacity depict better scores on methodology implemented. It is not possible to appropriate handle modern-day supply chains on spread sheets. Still, in spite of the adoption of numerous supply chain planning tools, spread sheets remain the most popular planning tools. There are several associated issues, including challenges involving scalability, user interface, data model appropriateness and an absence of what-if models, and doing it the right way contributes immensely to driving company performance (Cecere, 2014).
1. Superior consumer satisfaction and integration
Buyers anticipate superior service. When they pay for the perfect fulfillment of their requirements, they expect its timely, intact delivery. In the event any issue crops up, they expect transparency on the organization’s part with regard to what went wrong and how the issue will be resolved. Particularly today, when it is easy for clients to slam organizations in front of a crowd of millions on social networking sites, brand reputations face unprecedented risks of damage from avoidable errors in their supply chain operations (Yu et al., 2013).
It is widely recognized that supply chains’ strength may be determined by their weakest links. An organization may shift finished goods from a Chinese manufacturing unit to America, clear customs checks and transfer them to a given distribution facility in an extremely short time. However, if the delivery to customers doesn’t occur on time, they will remain unsatisfied and this will mean a supply chain failure (Yu et al., 2013).
1. Capability of expecting and handling risk
Even after forging sound contracts and associations with service providers and suppliers, it is possible for external events to threaten one’s supply chain. Political unrest, nationwide labor movements, economic campaigns, and entire revolutions in regime are examples of external factors that generated turbulence in summer 2011 (Trunick, 2011). Media channels concentrated on political and human struggles, but a few unnoticed elements garnered the supply chain and logistics sectors’ attention (Trunick, 2011). Effective supply chains should be able to predict, and appropriate handle, such risks.
1. Universally optimized operations
For attaining universally optimized operations, it is necessary for supply chains to integrate the following components: partner collaboration, information technology investments, explicit, to-the-point communication, updation of workforce skills, and evaluation of legacy information technology infrastructures. In addition organizations need to establish targets, allow enough execution time, remain open-minded, understand software vendors, and set down and supervise metrics.












References
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