Can your supply chain excel at both efficiency and responsiveness?

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There is more pressure now than ever to build a supply chain that is as efficient and responsive as possible – but is it possible to achieve both?

By Sid Holian, managing director of Bis Henderson Consulting, an operating division of Bis Henderson Group

More and more supply chain managers are coming under pressure from various angles. 

An increasingly globalised market requires your supply chain to be agile, with efficiency on an international scale. For consumer goods companies, a competitive cost price is a pre-requisite. If your product is deemed too expensive, you severely limit your chances of success. Keeping costs low demands as cost-efficient a supply chain as possible. 

But it is also well-documented that consumers are becoming more and more demanding in terms of service and choice.  Product life cycles are shortening to make room for diversity in product offerings. If your supply chain cannot respond to these windows of opportunity in the market, you are bound to miss out.

What does supply chain efficiency in action look like?

An efficient supply chain is crucial for boosting your bottom line. But what are the hallmarks of efficiency in your supply chain? 

  • Optimisation throughout your supply chain

It’s important to ensure that every aspect of your supply chain is optimised for meeting your business objectives. This encompasses your travel routes, warehouses, personnel and computer processes. Every aspect of your supply chain infrastructure should be performing to its fullest. Inefficient travel routes lead to disruptive lead times; inaccessible or unused warehouses and redundant computing systems are a waste of your assets. 

  • Working with exceptional logistics partners

If you are outsourcing, your third party logistics partners need to be of the highest calibre. If your 3PL aren’t carrying their weight, the optimisation of your internal supply chain infrastructure will be for nothing. When choosing partners for your supply chain, look for state of the art technologies, a proven track record and honesty and transparency.

  • Demonstrable customer satisfaction

The ultimate litmus test of an efficient supply chain is demonstrable customer satisfaction. Getting products to consumers quickly, and for the best possible price, is a sure-fire route to achieving this. 

What are the qualities of a responsive supply chain?

  • Accurate order fulfilment 

Swift delivery and a low cost are of course crucial for keeping customers happy; but efficient order fulfilment cannot come at the cost of accuracy. If an incorrect or incomplete order is delivered, you are likely to have your margins diminished by offering refunds and free returns – not to mention the damage to your brand reputation.

  • Scalable fulfilment

All businesses – particularly within the consumer goods sector – experience ups and downs in product demand. A sign of a responsive supply chain is one that demonstrates situational awareness, anticipating and preparing for changing marketplace trends. To be truly responsive, you must be able to supply products that make the most of short-term windows of opportunity in the market. This will allow you to take advantage of the potential profitability of all your product collections. 

  • Excellent customer service

A responsive supply chain is one that excels at customer service. For example, multi-channel retailer must have effective carriage management systems to meet the increasing consumer demand for swift product returns. Situational awareness is again important here to avoid customer disappointment over, for example, trending collections selling out.

Finding the right balance between efficiency and responsiveness

Trade-offs are sometimes necessary between efficiency and responsiveness, but it is not always the case that when one attribute thrives, the other suffers. Managing an effective supply chain is all about finding the right balance between both. What this looks like will depend on your unique situation, but there is a clear overlap between efficiency and responsiveness: customer value. Evaluating customer reviews for the service and product you are providing, and taking in to account the profitability of your supply chain, is integral to managing an effective supply chain. 

A proven supply chain consultancy will be able to evaluate the efficacy of your supply chain to meet your business demands, please customers and maintain cost-efficiency. They will help you determine when it is vital to be efficient, or when you should prioritise responsiveness, depending on your requirments. 

To gain further insights and a greater understanding of how to use technology to create an agile and responsive supply chain, download the free eBook at: https://www.bis-henderson.com/ebook-3-launch/