Elements of a Robust Supply Chain*


In today’s business environment, every organization has recognized the importance of the supply chain for their business success. Many leading companies are adopting strong and robust measures to establish the Supply Chain as a standalone business operating function. Supply chain strategies will vary for each and every organization but there are some robust practices that will commonly allow all the companies to enhance their supply chain capability.

Here are the seven elements of a robust supply chain.

1. Recruiting the right supply chain talent

In many organizations supply chain professionals are not recruited by verifying their educational background in SCM. A university degree in any field was set as a basic eligibility criteria by many organizations for an entry-level or other positions in SCM. But in today’s challenging environment mathematical and analytical skills are highly required by a supply chain professional. Therefore recruiting a candidate with proper formal education in SCM or professionals certified by globally recognized supply chain organizations such as APICS and CIPS are preferred in the long run for making your company’s supply chain a robust one.

2. Set benchmarking Strategies

Most of the business proves that working towards achieving a better metrics associated with the supply chain function will provide a successful business outcome. Metrics are designed and benchmarks are set by considering all the internal capabilities and external rivals. Achieving these metrics will eventually, improve the company’s performance and gain a competitive advantage over the rivals. Some of the metrics for constructing a robust supply chain are effectiveness of SCM in reducing working capital, increasing return on assets, good availability factor, the true cost of obsolete industry.

3. Encourage by Awards and Incentives

Happy employees and suppliers are directly connected to business success. The established metrics are achieved only with the support of supply chain partners and employees. In order to align with the company’s interests, they must be encouraged by reward and incentive programs to benefit themselves and the overall firm.

4. Update with Current Supply Chain Trends and Technologies

The management should ensure that the company’s supply chain activities are operating with recent innovations and technologies in the market. Lagging behind in technology will be a competitive disadvantage for the firm. As of now artificial intelligence is dominating the market and making a revolution in all areas of the supply chain.

5. Never compromise the supply chain for other cross-functional needs

The top management should ensure that the supply chain goals are not compromised while concentrating on other cross-functional needs. If once compromised it may get repeated and its consequences affect the business in the long run. Supply chain functions are often cross related to other functions like finance, marketing, and sales. Increasing sales and promotions, growing market share are important aspects for a company to look for, but recognizing that reducing logistics and inventory costs are also equally important and never to be compromised.

6. Consciously include supply chain in your business plan

Most of the business plans concentrate on factors such as market analysis, competitor analysis, product marketing, and sales strategies. But for building a robust supply chain we should include supply chain components into a business plan that aligns with the above factors. While negotiating on contracts, ensure that all the aspects of the supply chain are thoroughly studied.

7. Never fall for the consequences of short term gains

Sometimes companies may face low sales for a shorter period. In order to boost sales at the end of the quarter, discounts are announced by the sales team for short term gains. As a consequence customer's purchasing pattern gets changed which will further induce a surge in sales at the end of the quarter expecting discounts. This leads to supply chain disruptions like increased inventory costs, rushed production and delivery of goods. Therefore to make your supply chain a robust one align your sales tactics with supply chain planning.


Written by Malathi Dileepan

Malathi Dileepan is a B.Tech. in Information Technology and has been working as Manager [Certifications and Consulting] since 2012. She has led several business analysis projects and has tremendous knowledge in all the 20+ certifications offered by Fhyzics.

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