OM/U4 Topic 4 Supply Chain efficiency, Core and Reverse Supply Chain
Supply chain efficiency is related to whether a company’s processes are harnessing resources in the best way possible, whether those resources are financial, human, technological or physical. Notice that the definition of efficiency says nothing about improving customer service. You might have a very efficient supply chain that minimizes costs for materials and packaging but leaves your customers fuming when the product they receive is not up to their specifications. The term efficiency is also a very abstract one. People have different definitions, and again…what may be deemed “efficient” in one part of your supply chain may adversely affect another area of your business.
Five WAYS TO IMPROVE SUPPLY CHAIN EFFICIENCY
- Communicate Efficiently
Making a commitment to weekly big picture meetings and daily task force meetings gives your team an opportunity address upcoming logistics situations in advance. We suggest face-to-face meetings whenever possible to avoid miscommunications and vague overviews.
- Train Your Workforce Comprehensively
A training program should teach your professionals more than where the break room is and what daily tasks they should perform. Take the opportunity to share your company’s comprehensive plan to increase productivity while reducing costs. Teach them about the importance of internal and external customer service.
Give your workforce an incentive to act in accordance with your business’ vision, mission and values. Sharing this and training will drive a successful organization by creating aligned goals while improving supply chain productivity.
- Increase Information Sharing and Visibility
Make your logistics processes more transparent to your workforce and your clients. Eliminate slow, unreliable spreadsheets to provide information. Share the most up-to-date information through current technology solutions.
Other ways to increase information sharing include taking advantage of big data analytics available to you, measuring supply chain metrics regularly and involving employees in finding inefficiencies in the system. By informing your workforce and your clients, you create opportunities for innovation.
- Analyze Information to Meet Customer Needs
Extend the belief that supply chains begin at the warehouse and end in a store because all products sent through your supply chain eventually reach an end user. Analyze transportation data to better inform your customer of trends and opportunities.
- Nurture Innovation in Partnerships
Supply chain managers should evaluate which suppliers possess capabilities they can tap into to help produce innovations in products, services or go-to-market strategies. They should play a key role by becoming less of a process executer and more of a process enabler. Looking for opportunities to improve current processes by leveraging supplier capabilities empowers both parties while benefiting the ultimate consumer.
Reverse Supply Chain
Reverse Supply Chain stands for all operations related to the reuse of products and materials. It is “the process of planning, implementing, and controlling the efficient, cost effective flow of raw materials, in-process inventory, finished goods and related information from the point of consumption to the point of origin for the purpose of recapturing value or proper disposal. More precisely, reverse logistics is the process of moving goods from their typical final destination for the purpose of capturing value, or proper disposal. Remanufacturing and refurbishing activities also may be included in the definition of reverse logistics.” The reverse logistics process includes the management and the sale of surplus as well as returned equipment and machines from the hardware leasing business. Normally, logistics deal with events that bring the product towards the customer. In the case of reverse logistics, the resource goes at least one step back in the supply chain. For instance, goods move from the customer to the distributor or to the manufacturer.
When a manufacturer’s product normally moves through the supply chain network, it is to reach the distributor or customer. Any process or management after the sale of the product involves reverse logistics. If the product is defective, the customer would return the product. The manufacturing firm would then have to organise shipping of the defective product, testing the product, dismantling, repairing, recycling or disposing the product. The product would travel in reverse through the supply chain network in order to retain any use from the defective product. The logistics for such matters is reverse logistics.