Supply chains are different. But one thing is true for each of them: they keep production flowing. Although this high value has been known at least since the Corona crisis, many production companies are hesitant to digitalise this element of their value creation – and if they do, then at a snail’s pace. The fear of upsetting this fragile component, on which so much depends, with initiated measures is too great.
It is right and important to consider all possible scenarios strategically before taking operational steps. Closing one’s mind to the possibilities and, above all, to developments will also take one further – but in the wrong direction. Here it is clear that fear is a bad advisor.
The decisive criteria
The ultimate goal of an optimised supply chain is to increase production efficiency. This goal consists of a sequence of sub-goals: Preventing disruptions to avoid production losses or machine downtime, keeping warehouse utilisation constant, ensuring agreed delivery times to the end customer and, finally, avoiding additional costs.
However, the causality shown is also the reason why a digital strategy with the motto “a little here, a little there” cannot lead to success. The following applies:
- Take sufficient time for strategic planning
- Choose a software solution that can cover as many elements of the supply chain as possible
- Move forward with the strategy and implementation of the solution.
Three criteria are decisive for the success of the supply chain – regardless of how the supply chain and the strategy are structured in detail:
The all-important question remains: How can these criteria be fulfilled?
The key to success: data
The answer is not surprising: with the collection of data, intelligent use of data and resulting actions. The following five steps will optimise any supply chain and make it ready for the future:
1. Access to and evaluation of customer data
A successful supply chain is oriented towards the customer. This refers to the provision of different order channels, to the analysis of customer needs, to customer-based scheduling and delivery. Most companies already have masses of customer data. The task now is to qualify the customer data set so that the clearest possible picture can be drawn of which aspects really matter to customers.
2. Define key figures
No insights can be drawn from data sets if you don’t know what you are looking for. And success cannot be measured if there are no target figures. The following five metrics are fundamental to supply chain optimisation: Perfect Order Index, Cash-to-Cash Cycle Time, Supply Chain Cycle Time, Fill Rate and Inventory Turnover.
3. Supplier selection and monitoring
Selecting the right suppliers is a crucial part of a successful supply chain. Based on customer data, criteria can be established on the basis of which suppliers are selected or replaced in the first step. However, it is indispensable to subject the suppliers to constant monitoring. An intelligent software solution makes it possible to accurately measure and track supplier performance by monitoring these criteria.
4. Notification system
Based on a variety of real-time data, advanced software solutions provide an alert system when processes deviate from the path defined as ideal. Alerts can be configured for a variety of scenarios. These messages help identify trouble spots and initiate immediate problem resolution before they cause more widespread disruptions.
5. Analysis and optimised planning
A core element of the optimised supply chain is supply planning. Efficient planning takes into account past developments, focuses on expected events and yet remains flexible enough to react to changes. Based on data collected in real time and analysed taking into account various aspects and target variables, supply chain planning can be based on a whole new foundation – and thus, like a cycle, make an important contribution to a supply chain that continues to be optimised.
Software is not everything
However, intelligent software alone is not enough. It also requires strategic future thinking and the willingness of people to integrate the technology into their daily work. The latter in particular is one of the most common reasons why digitisation projects in companies fail: people do not work, work reluctantly and work ineffectively with the existing software solutions. Therefore, when strategically considering which software solution to use, it is essential to consider user-friendliness. A user-friendly software solution is characterised by intuitive interface guidance, structured data output and an integrated approach.
Don’t miss the opportunity that a digitalised supply chain offers for your production! Find out more here!