The logistics of supply chains can be a more complicated process than advertised on TV.
Television commercials make it look simple: An important package is shipped at the last-minute and arrives just in time to meet a pressing need for a business. But there’s a lot more to it than that – especially when your company operates internationally, or is shipping perishable items.
The difference between a situation being a success or failure can occur at any point along the supply chain. From the beginning, a company must rely on accurate forecasts of product development and pricing. And a wide range of issues can affect a company’s ability to deliver its service or product on time, including political upheaval, unexpected weather, or changes in import or export laws.
Considerations with international supply chains
One case study in expert supply chain management is the company Edible Arrangements, which grew from a single store to a company that ships fresh fruit bouquets from more than 1,000 stores worldwide. Planning and thinking about what items can be locally sourced, and what needs to be supplied to various stores in advance is how the company stays on top of orders.
Thomas Phelps of Alloquor Supply Chain Consulting explains that international supply chain management is complex. For example, Phelps says that if a business produces its product in one country but sells it primarily in another, the way that product gets from Point A to Point B could make a 25 percent difference in a company’s bottom line, due to issues like taxes.
Joe Francis, executive director of Supply Chain Council told writer Jennifer Schiff, “Despite decades of encouragement and hundreds of millions of dollars dumped into information technology, most companies still don’t have their supply chain metrics under control.”
Francis suggests studying and measuring agility indicators, perfect order fulfillment and cash-to-cash cycle time.
Schiff cites John Freund, CEO of JumpTech, and his advice to “do your homework and start your research with systems that were designed for companies in your industry.” Shawn Casemore, founder of Casemore & Co., agrees. “Collecting information that is not relevant, and serves only to meet the criteria of an enterprise solution, is not the way to efficiently manage a business,” he told Schiff.
Where some companies go wrong is focusing too intently on improving one component of the supply chain, without looking at the “big picture.” Having a single person to oversee the whole process can help ensure continuity of the supply chain, and as that’s becoming a trend, it’s a good time for people with a business management degree to begin exploring a career in supply chain logistical management.
The work of building and maintaining a reliable supply chain never ends because business is not a static system. Even once established, managers must constantly evaluate influences to the supply chain that may be, or might become, weak links to the system. As Kim Nash cites in her article, “How to Find Weak Links in Your Supply Chain,” for the website CIO.com, managing supply-chain risks is the second most important business challenge for the near future. The number one challenge, achieving customer loyalty, is a given loss if your company can’t deliver your products to them, no matter how much they like you.
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