6 Best Practices for Enterprise Supply Chain Management!

In the early stages of development, companies may settle for a few excellent suppliers, using simple and convenient methods to purchase or manufacture products, track inventory, and fulfill orders. However, when annual revenue exceeds $10 million, continuing to use simple systems such as spreadsheets, paper packing lists, and manually created shipping labels can lead to problems. These issues can directly affect customer experience, sales operations, and corporate profitability.

 

6 Best Practices for Expanding the Supply Chain

Before understanding the best practices for supply chain management, please note that supply chain optimization is an ongoing process. Even with top talent, processes, and systems, it is not a one-time task. In other words, companies need to continuously monitor and adjust their supply chains. Here are some suggestions to prevent uncontrolled expansion and reduce costs, helping companies serve customers better.

 

01 Select and closely monitor meaningful KPIs

 There are many supply chain metrics, and common indicators and KPIs include inventory turnover, profit margins, on-time delivery rates, and perfect order rates. Companies need to measure the current performance of the supply chain through appropriate methods to determine where the supply chain has problems - intuition and anecdotal evidence have always been very unreliable.

 

02 Calculate the real costs

 It is impractical to manually calculate all the data for each product in the product catalog, especially as the business grows, and many companies do not know the actual landed cost of the goods. Without understanding the actual landed costs of various products, companies cannot accurately calculate product profits. Cost information is crucial for companies to determine which products to promote, reduce, or discontinue.

 

03 Focus on sales and inventory indicators

 Defining the optimal inventory level is a major challenge for all product-based companies. To make more reliable and accurate forecasts, companies must closely monitor available inventory and sales dynamics, continuously track trend changes. At the same time, in industries with fast iteration and frequent product line changes, such as apparel or consumer electronics, companies also need to pay special attention to consumer trends and refer to similar products previously sold to make decisions.

 

04 Develop new channels cautiously

 In the long run, multi-channel sales are indeed very important, but this does not mean that companies should immediately sell to every potential customer who requests it. For example, wholesaling products to retailers who simply want to purchase in bulk to get a lower unit price can erode company profits. Therefore, please first understand your customers and how they want to make purchases, then make strategic inventory allocation decisions, and gradually develop new channels during business development.

 

05 Make decisions with an eye on the future

The supply chain, as the name suggests, is a chain of interconnected links. This is very important when your company is cutting costs or making other adjustments. Pursuing a "quick win" can improve profits in a short period, but it can lead to many other problems and is not advisable. As the business scale approaches $50 million, these issues will be magnified. To fully understand the impact of supply chain decisions, companies must delve into the entire supply chain network.

 

06 Focus on continuous improvement 

The supply chain will never be perfect; there are always areas to be strengthened and problems to be solved. Companies should adopt a long-term mindset, make a series of minor improvements step by step, and achieve significant results over time.

 

Using Advanced Technology to Optimize the Supply Chain

To implement all of the above best practices, a prerequisite is that companies must be able to access accurate, extensive, and up-to-date data. To gain this insight, companies need to deploy a unified system to automatically collect and report information across the entire supply chain network, including supplier orders, existing inventory, freight availability, customer shipments, and so on.

 

When evaluating supply chain solutions, the operations team should focus on the following features:

· Extensive reporting capabilities. Although almost all business management applications can collect important data for the company, and many applications can also update data in real-time, their reporting capabilities vary: some solutions only provide pre-built reports, and some only provide a series of pre-filled reports for users to choose from. For this, please choose a system that supports users to easily build any required report and supports automatic data updates through an easy-to-understand dashboard after construction.

· Multi-site, detailed inventory tracking. Even if your company has not yet implemented multi-store or multi-warehouse inventory strategies, when annual revenue approaches $50 million, you will still face this issue. For this, many entry-level inventory management systems cannot track multi-site inventory or goods in transit, making it difficult for companies to optimize inventory levels.

· Minimize third-party integrations. To get all the reports and metrics you need, you need to let information flow automatically between your various SCM solutions and return to the financial system. In reality, these standalone software often binds third-party connectors, which not only need to be implemented and managed by companies, but may also fail, blocking the exchange of information, especially after one of the applications is upgraded.

· Flexibility and configurability. No two companies are exactly the same, so choose a system that can meet your unique needs. An ideal solution should not only support companies to easily adjust workflows, add reports, or make other minor adjustments as the business grows, but also support various inventory costing methods such as "first-in, first-out" and "last-in, first-out," and support users to reposition products to other locations in the warehouse as needed.

Looking Forward, Strengthening the Chain with "Data"

Oracle NetSuite provides a unified platform that integrates all the above elements, helping companies efficiently manage supply chains across multiple continents and time zones. At the same time, tools like Oracle NetSuite provide a supply chain console that allows leadership to monitor key supply chain KPIs at a glance.

After selecting a supply chain management system suitable for your company, you can also deeply inspect and improve supply chain processes during the implementation process, helping to fulfill the above best practices.