Managing a business means paying attention to the details. It’s not uncommon for businesses to struggle due to bad supply chain management. They make decisions, commonly, to boost profits or trim back where they think it’s going to save money. Yet, this nearly always leads to costly mistakes later.
Mistakes like this have happened to many organizations. In 2017, the luxury German car maker BMW AG was forced to halt production of its lineup of vehicles due to a parts shortage. The company’s global supply chain was ground to a halt thanks to a single part’s inaccessibility from an international supplier. That is a direct hit to profits.
Other times, mistakes like this translate into brand damage. Reputation is everything for a company. When there’s a lack of visibility in the supply chain, it can lead to hidden problems that often arise with damaging results, often unethical practices that can damage a company’s reputation in moments. One example was the revelation that cobalt being used by companies such as Volkswagen AG and Apple Inc (along with 20 other manufacturers) was being dug by Congolese children and miners working in inhumane conditions.
So, what can you do to avoid these supply chain pitfalls?
Standardize Data Processes & Audit Suppliers
One of the simplest of moves with the most profound benefit is the standardization of data collection and storage by using different locations or countries. A common problem occurs when too many systems in different formats are stored in various companies across multiple locations – that is even a higher risk when those locations are developing countries.
Another complication stems from companies using multiple visibility solutions – often trying to improve transparency. Yet, none of these work to communicate with each other and, often, share limited insight on the whole system.
By auditing the company’s suppliers and ensuring they are meeting expected and agreed standards, it’s possible to minimize some risk. The end goal is to ensure all standards are being followed across the entire supply chain. That includes every level of service, including subcontractors, contractors, suppliers, and others. Keep a focus on ethical issues in this area specifically.
Enable Digital Tools to Track Your Shipments at Every Step
Digital tools improve efficiencies and minimize risks at the best rate possible. For example, using mobile data capture, it’s possible to gather data, including container numbers, wagon numbers, serial numbers, and barcodes, in seconds.
This can do most of the work necessary, including identifying pain points in the supply chain when they are happening. This allows for a resolution to occur sooner. It’s easy to see this benefit, for example, with the use of tracking down a lost or damaged package.
Shining a light on these blind spots protects your company’s bottom line. It also seals your reputation with other companies as a reliable industry leader. Even public perception improves. There’s no way to ignore the benefits and efficiencies that come from better supply chain management.