2/26/2021 5 Factors of Effective Supply Chain Management

5 Factors to Consider for Effective Supply Chain Optimization

Written by Michael Clark
June 20, 2013

Supply chain professionals are under more pressure than ever to

optimize processes and reduce spend. That’s no small feat. COVID-19
only adds to the squeeze. Resilience and agility is needed.

Fortunately, there are low-cost SCM technologies available to bolster

your business.

Prior to the pandemic, widespread changes were occurring – from the

rise of mobile inventory solutions to robots in warehouse
automation. Inventory-heavy businesses must consider the cost and
implications of these supply chain optimization strategies. COVID-19
doesn’t rule out these solutions. However, it may influence your
selection.

The supply chain industry has been significantly altered

by globalization, the new normal of a world facing a pandemic, and
Equipping your teams with supply chain mobility software is essential
the emergence of new technologies that provide ways to improve succeed in the 21st century.
processes. While developments are still unraveling quickly, there are
numerous keys to supply chain optimization that remain relatively constant.

The Hindu Business Line contributor Harishanker Subramaniam outlined a few key operations and supply chain
management factors to consider as major shifts take place in world trade. While many companies have witnessed significant
success as world trade shifts toward rapid growth markets such as India, China, Vietnam and Thailand, it is important for
businesses to effectively manage variables like cross-border and country taxes.

One of the key factors Subramaniam detailed is the necessity of facilitating communication across the organization. Being
aware of potential challenges is the first step on the way to optimization.

“Indirect taxes impact a variety of corporate functions including finance, tax, legal, logistics, supply chain, real estate and
operations; so communication and dissemination of information is vital,” Subramaniam wrote.

1. Important Supply Chain Metrics

Organizations need to consider how varying tax codes will impact operations, so business decision-makers should consider
utilizing supply chain management systems and monitoring numerous metrics.

Consider these measurements for tracking materials to generate better supply chain analytics:

Inventory
Percentage of electronic data capture (AIDC)
Granular metrics for high-cost supplies
Costs of procedures
Standard product identifiers

Tracking each of these KPIs becomes easier with a mobile data collection solution. Barcoding and automatic data capture
ensure that material movements are collected perfectly and in real time for your ERP.

2. Inventory and Electronic Data Capture Percentage

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2/26/2021 5 Factors of Effective Supply Chain Management
In regard to effective inventory management, it is crucial to have inventory tracking methods for perishable inventory,
such as those used by hospitals or food companies. Expiring products can be problematic in terms of wasted money and
effort. These costs fall primarily on the provider.

Significant money can be saved with a real-time inventory solution in place.

Learn More: Where’s My Inventory? Here It Is »

If data is not captured with digital automation (e.g. barcode scanning) and standardized, then you aren’t collecting the high
quality data necessary for quality decision making. These insights can be as simple as understanding what products are being
purchased in what quantity from which suppliers.

Accurate data can also be leveraged for more agile decisions, such as re-allocating work to staff due to a sudden change in
customer demand.

3. High-Dollar Products and Procedural Costs

While monitoring supply chain metrics are important to effectively control overhead, granular data can be useful for oversight
of high-cost materials. An example of this would be tracking supply cost per case of goods that are used for a specific
manufacturing order for a certain customer. Or semiconductors that require tracking by expiration dates and lot numbers.

Automated data collection is especially useful in this respect. The visibility gained by instant material data can inform
continuous improvement strategies, as well as financial and supply chain integration.

Mobile barcoding and data collection can ensure big ticket items, like equipment and expensive parts, can be found anywhere,
anytime. Real-time asset tracking software can easily integrate into an ERP mobility solution.

SIMILAR: Asset Tracking’s Impact on Shop Floor Uptime »

4. Industry Standards
As always, one of the most valuable metrics for material handlers in regulated industries is the tracking of unique product
identifiers. Not just SKUs, but lot and serial numbers, among others. The ability to monitor these as components or
ingredients are used in the manufacturing process is crucial for regulatory compliance.

Doing it by hand is next to impossible. Traceability software automates this process, shielding your organization from
undue hardship during an audit or recall. The investment quickly pays for itself – and more.

Benefits include better usage tracking and recall preparedness. Digital automation of the data collection process creates the
possibility for truly effective spend analysis, supply chain optimization and comparative research.

However, the value of this data can only be realized if the data is correct to begin with.

5. Human Supply Chains

Now, more than ever, supply chain companies are realizing a pressing need for investment in human-centric technologies.
Essential workforces can only do so much on their own without organizational support. People-augmenting technologies like
mobile software can lighten the burden for over-stressed frontline staff, decreasing turnover and absenteeism.

But the benefits don’t end there. Extending your ERP with mobility increases productivity per worker while also reducing
costs and increasing accuracy and throughput. Mobile can be used to enhance sustainable social distancing as well. It is
expected that more distribution and manufacturing companies will realize the value of mobile solutions as a new form of
PPE to protect employees.

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