The supply chains at the global level are facing difficult times. Companies want to enter new markets with lower costs and better speed. However, many executives are struggling to meet goals in the face of new challenges.
Factors such as higher transportation and energy costs are enough to throw a wrench into a company’s supply chain. Building a strong strategic plan can assist executives in achieving their goals.
1.Evaluate Higher Transportation Costs
It’s no surprise that energy and transportation costs have experienced a sharp increase. Companies are scrambling to balance these costs while staying competitive in current market conditions. Striking the right balance can add up to increased efficiency and profit gains.
2.Manage Product Lead Time
Although producing oversees offers less expensive labor, this may also result in longer lead time. These factors need to be carefully considered when planning production.
3.Review Exchange Rates and Tariffs
Tariff and exchange rate challenges are introduced when a company manufactures overseas. Senior managers should carefully evaluate these components and identify opportunities to increase efficiencies.
4.Manage Complex Products Closely
Consumers are demanding more sophisticated products. Companies are working creatively to meet these needs, but sometimes production gets left in a lurch. Producing more complex products can slow down production, leaving the supply chain out of balance.
The solution to this issue is forming strong communication channels between marketing and operations. Working closely will provide a synergy between launching a new product and meeting production demands. It is imperative to check fulfillment services precisely to avoid gaps between demand and services.
5.The Challenge of Reducing Costs
Senior managers are always evaluating strategies to increase efficiencies and lower costs. Managing global supply chains in this demanding market requires strategic oversight. Leaders from all business units need to come together to create strategic goals that are measurable and realistic. A systematic way to measure these goals should be established, so results can be tracked.
6.Evaluating Ways to Get Products to Market Quicker
Once a company discovers an innovative product, marketing and sales push hard to bring the item to market. Operations are the business unit that can best provide knowledge on the capacity to produce a product while maintaining a high level of customer service.
If production is slammed with orders, angry customers will surface, creating a lasting effect on a business’ reputation. A strategic plan for getting products to market in the most efficient way should be created.
Senior managers should regularly meet to strike a balance between bringing a product to market while persevering production and customer service. Discovering this balance will positively affect the global supply chain.
7. Find Communication Efficiencies in Manufacturing
Companies serving a global marketplace may have manufacturing facilities spread out all over the world. The communication flow across such a large area may become challenging for some businesses. This can be addressed by creating formal procedures for sharing information across all locations. The results of making this change are improved consistency and performance.
8.Examine the Benefits of Centralization
Many companies are moving away from local management to a centralized model. The manufacturing may be accomplished overseas, while the home office is charged with managing those tasks.
9.Retaining Employees in a Global Marketplace
As your company goes abroad, attracting and retaining talented employees may be challenging. Spend time and resources on creating an attractive work environment for employees. The time and effort invested initially will pay off with a decreased turnover ratio.
10.Managing Compatibility Issues
Managing technical infrastructure can be challenging enough in the local market. But once you introduce vendors from around the world, the issue becomes more complex. Spend time working with vendors to ensure technology works seamlessly across all channels. Frontloading your investment will minimize issues down the road.
This will also improve your efficiency and profit potential. Many business owners are continually looking for ways to make their operations work as smoothly as possible, subscribing to the adage that “if you’re not moving forward, you’re moving backward.”
One of the best ways to improve efficiency is by making sure that the availability of your product keeps up with demand. Several companies are turning to supply chain consulting to help them reduce costs and maximize profits.
The principle of keeping up with demand may sound simple, but it can become quite complex when sales unexpectedly rise sharply. Granted, it can be an excellent problem to have in the short term. However, if the problem is not quickly rectified, it can have a crippling effect on both present and future business.
Most owners and executives are experts in producing products and making them better – not in managing their operations. Consulting can bridge those gaps and ensure that a company is operating at peak efficiency.
Supply Chain Consulting Professionals know that there are different aspects of your operation that must be taken into account separately. For example, consumers are always looking for lower prices. By increasing the efficiency of your operations, you can reduce your costs and pass the savings on to your customers.