How can you turn your logistics into a powerful driver of value? By optimising your supply chain!

The world is changing at breakneck speed, bringing with it a profound transformation of our businesses. The supply chain is no exception to the rule: with revolutions such as the one-day delivery promised by Amazon, the lines have moved.

Logistics has become a differentiating factor for companies, which are obliged to satisfy the ever more exacting demands of their customers, at a time when the way in which business is conducted is becoming ever more complex.

As a result, optimising the supply chain must become a top priority for organisations. By improving the performance of their supply chain, they can become more agile and responsive, and reduce the costs associated with these operations.

However, this rationalisation work remains closely linked to the use of innovative tools and technologies.

Let's set a course for performance, thanks to our article 👉

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What is the supply chain?

The supply chain refers to the entire logistics process, from the replenishment of raw materials to the delivery of the product to the end customer, via storage in warehouses.

It therefore involves

• The circulation of different flows:
  • material flows, i.e. raw materials for production, finished products for sale, etc. ;
  • information flows, encompassing all data linked to the supply chain (information on customers, orders, suppliers, etc.);
  • financial and administrative flows, relating to the various financial and administrative controls and processes.
    
    
• The involvement of numerous players:
  • suppliers
  • logistics managers
  • producers
  • transporters,
  • distributors
  • accountants, etc.

The supply chain is a complex whole, in which each link depends on the others. A failure in one segment can jeopardise the entire chain.

The supply chain therefore has a resolutely strategic dimension. It requires perfect optimisation, in order to strike a balance between its three main challenges:

• anticipating risks
• customer satisfaction, in terms of receiving the product on time and in good condition, of course;
• controlling the costs associated with the company's logistics.

💡 To improve efficiency, organisations are increasingly turning to the expertise of a supply chain manager, whose specific role is to steer and coordinate all logistics flows.

Why optimise the supply chain? The 4 key benefits

# 1 Control the supply chain from end to end

The supply chain is a complex whole, involving numerous flows and players.

By optimising it, you gain greater visibility. In other words, you can focus your actions on a precise element of the chain, while perceiving their impact on the whole process.

At the same time, you benefit from improved traceability across the supply chain. Who is doing what? When is it done? For what reasons? You can then effectively supervise the progress of production or delivery, anticipating problems and increasing the company's productivity.

#2 Anticipating demand and risks

Anticipating demand is another major supply chain challenge. Good supply and stock management means ordering the right quantity :

• to meet consumer needs
• while avoiding over-production and over-stocking, which are costly for the organisation.

The same applies to the risks associated with the various hazards that could compromise or even disrupt your supply chain.

By optimising your supply chain, you can keep your budget under control, while guaranteeing that your end customers receive their products on time.

#3 Reduce costs

Thanks to a good supply chain strategy, you can rationalise costs at every stage: product routing, storage, delivery, etc.

By having an overview of the entire chain, the supply chain manager is able to deploy certain operations more easily and intelligently, in order to reduce expenditure without damaging customer relations:

• prevent overstocking,
• reduce transport costs
• renegotiate contracts with suppliers, etc.

#4 Increase customer satisfaction

Respect for delivery times and quality of delivery service: these are two points on which consumers are becoming more and more demanding. Competition is fierce, and a customer who is dissatisfied because of a logistics problem will not only lose confidence in you, but will also be tempted to give you bad publicity.

It's easy to see why the supply chain is such an essential component of the customer experience and brand image.

How can you optimise the supply chain? 8 essential tips

Tip 1: Integrate the supply chain into the company's overall strategy

Despite the key issues surrounding the supply chain, too many companies fail to invest sufficient resources in this area. Yet the supply chain must be an integral part of their strategy, and management must be aware of the value it generates.

As a result, the supply chain needs to be designed in such a way as to serve the organisation's overall objectives in a coherent manner. In short, there are no standard models; each type of organisation has its own supply chain model...

... and the budget needed to deploy it! Among other things, this means

• recruitment, particularly of a supply chain manager
• investing in dedicated tools and technologies.

Tip 2: Map and coordinate supply chain processes

To get the most out of your supply chain, you need to understand its structure, so that you can :

• manage the interdependencies between the various links in the chain as effectively as possible ;
• allocate the necessary resources to each stage.

With supply chain process mapping, the company becomes more efficient and identifies any blocking points in order to prevent risks.

💡 These processes must take into account all the components of the supply chain, so as to guide tactics as effectively as possible. But what are the 4 pillars of supply chain management activities? Generally speaking, they are :

• the resources deployed to meet customer needs (human, technological, financial resources, etc.),
• optimisation of logistics costs
• logistics lead times
• quality of service.

Tip 3: Listen to and consider customer needs

The quality of your supply chain is an integral part of your brand image, and consumer satisfaction must be at the heart of your strategy.

So build your supply chain in such a way as to satisfy the needs of your customers... but above all your target customers! These needs vary according to your personas and the values embodied by your brand.

👉 For example, do you want to outshine Amazon? You'll definitely need to work on shortening your delivery times. If, on the other hand, your customer base seems to be more affected by environmental and social issues, then favour eco-responsible modes of transport (and communicate the whys and wherefores of this choice), even if it means extending delivery times.

Tip no. 4: Manage supplier relations as effectively as possible

According to Les Echos, "35% of the disruptions encountered over the last five years have come from Tier 1 subcontractors, 15% from Tier 2 and 5% from Tier 3 and above".

A good supply chain requires effective collaboration between all the players involved. Suppliers play a key role in this. A problem at this level will have repercussions for the rest of the chain.

But the good news is that companies have many cards to play to limit the risks and build a fruitful partnership. For example, they can

• sourcing suppliers and ensuring that they are reliable and financially sound at an early stage;
• diversify them
• establish a solid relationship of trust with them, to :
  • negotiate prices more easily
  • improve communication and avoid delays.

Tip 5: Anticipate!

There are many factors that can affect the smooth running of your supply chain, or even lead to disruptions.

These factors are :

• external: bad weather, health crisis, geopolitical context, etc.
• internal to your supply chain: suppliers, warehouses, transport, etc.

To counter these threats, there are a number of good practices to follow:

• source your suppliers more effectively, as mentioned above
• Opt for a quality assurance approach in the event of a product recall;
• Use collaborative planning between the various players in the supply chain;
• draw up a continuity plan, with different scenarios, to respond more effectively to disruptions in the chain;
• introduce a cybersecurity policy, etc.

At the same time, you should always keep an eye on developments likely to have an impact on the quality of your services, such as

• your customers' expectations
• the actions of your competitors
• regulations
• the geopolitical situation, etc.

Tip no. 6: Organise your warehouses efficiently

Alongside supplier relations, warehouses are another major area for improvement. And with good reason: poor management has consequences for costs and the customer experience. And then there are the health and safety issues for your teams.

To make your warehouse organisation more efficient, adopt the following good habits:

• structure spaces intelligently ;
• use cross-docking;
• focus on quality control, etc.

💡 Find out more about our tips in our article dedicated to warehouse management.

Tip 7: Define and monitor your KPIs

To ensure that your strategy is properly monitored, but also to anticipate risks, you can't do without performance indicators.

There are many logistics KPIs, such as :

• fill rate
• service rate
• stock rotation
• average stock
• One Time Delivery, etc.

💡 And there's still plenty to choose from! Our advice: go for the essentials, to avoid your reporting turning into a gas factory. So select only the metrics that are most consistent with your objectives and the specific features of your supply chain.

Tip 8: Use technology to automate your supply chain management

This is undoubtedly the most important piece of advice in this article, because in reality, orchestrating a supply chain masterfully is almost impossible without the support of technology. It's hard to work with Excel spreadsheets alone!

Now, thanks to new technologies, in particular AI, blockchain and IoT, there are tools that streamline the management of your supply chain from end to end.

In particular, they enable you to decompartmentalise your data and then connect it together, with the aim of :

• ensure the fluidity of the entire process ;
• break down the silos that inevitably lead to a lack of global visibility.

What tools are needed to automate the supply chain?

Automating the supply chain is therefore the key to successful management. And this automation essentially involves the use of specific software.

There are many types of solution capable of streamlining logistics processes. These include :

• WMS(Warehouse Management Systems), designed to manage warehouses;
• ERP(Enterprise Resources Planning), used to manage all company operations via a unified information system, made up of different modules (stock management, accounting, project management, sales management, etc.);
• APS(Advanced Planning System), dedicated to forecasting sales and market trends, for planning that is as close as possible to reality;
• TMS(Transport Management Systems), which automate and optimise the transport of goods.

And some software packages are a bit of all of the above. Such is the case with Metronome, a platform developed with the aim of building and then automating all your processes: supply chain, manufacturing, procurement and so on. More specifically, Metronome connects to all your data to feed your workflows. So everyone knows what they need to do, when they need to do it, all in real time and in perfect coordination. And thanks to intelligent triggers, the actions to be taken are 100% automatic.

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What's in it for us?

Improving the supply chain is no longer an option for companies. If they want to hold their own in this competitive market, they need to turn their supply chain into a powerful driver of value, with the aim of controlling costs but also (and above all!) pampering the customer.

Various actions can be taken to achieve this: process mapping, supplier sourcing, reorganisation of warehouses, etc.

In this context, the supply chain manager is required to orchestrate and unify practices, so as to ensure the solidity and coherence of the chain. It therefore seems difficult to ignore the technologies and software designed to exploit your data and use it to improve the fluidity and efficiency of your supply chain.