In a recent article over on Inbound Logistics on three keys to a successful supply chain trading partner network, Christopher Mazza, SVP of Business Development at IAS (International Asset Systems) claims that the three keys to a successful supply chain trading partner network are connectivity, visibility, and optimization. And those are definitely the fundamental requirements of a trading partner network.
But since a supply chain goes beyond a trading partner network, it leads one to ask what are the keys to a successful supply chain. This is a bit harder to answer in general because the depth and breadth of supply chain required is different for every vertical, and every company, and it can be argued that the most critical success factors are different across verticals and companies, but there are some common fundamentals. In this post we will attempt to identify some of them.
The first step is figuring out what is needed, when it is needed, and how much it should cost.
- e-Document Management
Then you need to find suppliers, send specs, get designs, get quotes, send responses, make awards, cut contracts, send orders, get invoices, process payments, etc. — all e-Documents.
You need software that allows you to interact online with your suppliers and partner and customers virtually and in real-time. (Connectivity in this day and age is a given — but it’s not enough unless there are collaborative elements to the connectivity).
Bid analysis, awards, logistics management, inventory management, real-time order management, etc. all require optimization to keep costs down and value up.
Knowing what is, and is not, where all the way back to suppliers of critical raw materials and sub-components, is key to avoiding devastating disruptions in today’s supply chain. If a raw material doesn’t reach a component supplier on time, then the component is not going to reach the tier 1 supplier on time, and your product is not going to reach you on time.
- Risk Monitoring
Hand in hand with visibility is near real-time risk monitoring. This involves monitoring significant global events (so that you know an earthquake has damaged a tier 2 supplier’s plant when it happens, not 60 days later when the product doesn’t ship), monitoring supplier’s financials and/or brand (as irresponsible corporate practices such as the use of child labour could be more damaging then to your organization than if they went bankrupt), and monitoring shipments and inventory for risk of loss or theft for starters.
The supply chain needs to be progressive, constantly on the look-out for new processes and technologies that can improve it, and forward moving when opportunities arise.
Furthermore, these requirements hold true across the board. And if you have trouble remembering them, think of the fact that when you bring these needs up, you are A VOICER of truth.