Optimising your supply chain: 5 best usages of optimisation in supply chain
Dare I say the dreaded the ‘C’ word? We have all lived through one of, if not the biggest disruption to businesses across the globe. Businesses and supply chains were crippled by the pandemic, placing an unprecedented level of pressure on supply chains to keep the world going.
But upon reflection, supply chain leaders continue to hold onto manual processes such as Excel spreadsheets, supported by 73% of supply chain leaders stating that this is their most used method of supply chain planning. But how would your supply chain fair if you were equipped with the correct optimisation tools? What role can a supply chain optimisation tool play in preparing your supply chain?
We explore why and give you the 5 best usages of optimisation in supply chain.
Dealing with disruptions
With a large portion of the industry heavily reliant upon Excel spreadsheets, dealing with major disruptions will continue to be difficult to manage. Planning teams spend a great deal of time dealing with the here-and-now, with little time to plan for the future and the ‘what-ifs’. What if next week our production levels fall by 10%? What if next month the absenteeism rate amongst our staff increases to 25% because of widespread illness? What would we do in that situation?
If the planning process for one day takes almost one day, then the planning team doesn’t have any time to consider future scenarios. It’s a deal-with-it-as-it-happens situation, where the team is constantly reacting to the situation on the ground, and making decisions with little or no thought of how it will affect them in the future. “Just get it done now!”, not realising that the resource they use to get it done will then not be available the next day, causing an even bigger problem.
Excel spreadsheets remain the preferred tool amongst the Supply Chain industry, Using an optimisation tool, allows the planning team to operate more efficiently, allowing them to consider the whole week, not just the present day. This can result in better decision making, and better visibility of how the business is trending in the medium to long term.
Without an optimisation tool, business as usual may be fine. Planners have their routine that keeps the business running smoothly, and the existing processes are working. But when things change quickly, maybe due to a major disruption, or because the business is growing rapidly, are those processes scalable? Do they allow the planners to adapt to the changing conditions?
Efficiency – a ‘buzz’ word not privy to the supply chain industry, but undeniably a pain point most if not all supply chain leaders try to address. As supply chains continue to grow and diversify, cross functional collaboration becomes more important, with efficiency requirements varying from each function. From managing inventory, to reducing manufacturing costs to optimising distribution; not having an optimisation tool across your supply chain can result in large inconsistencies and sub optimal outputs. Understanding your supply chain capability and having the correct strategy around how and where to improve can result in a faster response time, consistent processing times and better utilisation of human resources to name a few.
Doing more with less
We often think of improving efficiency as a way of lowering costs, or doing the same thing for less. While this is one benefit of an optimisation tool, the other side is being able to do more with the same resources. With the lack of visibility an Excel spreadsheet provides, it can leave key decision makers in the dark of understanding the full potential and capability of their supply chain.
Decisions around whether to include another distribution centre, or hiring extra staff can all be well thought through with an optimisation tool. Biarri worked with one of the largest liquid and petroleum gas distributors in New Zealand, to optimise their delivery of LPG gas bottles across the country. With the use of Biarri’s Run and Route optimisation tool, they were able to increase their capacity and increase their productivity whilst not having to increase their staff and delivery fleet. How, you ask? By having the correct optimisation tool that considers more effective options. Sometimes, finding a way to meet all your requirements with the resources you have is just too difficult to do “by hand”, with more powerful methods required.
Improved Bottom Line
We have seen through optimising your supply chain with the correct tool can lead to improved planning, better use of resources, and being more efficient, but the culmination of these benefits lead to lower overhead costs. By maximising resources and improving planning, your business can have greater control over your expenses whilst ensuring the quality of your products and services don’t suffer. Optimising your supply chain can lead to removing unnecessary expenses throughout your operation like production and logistics.
Make your supply chain your competitive advantage by implementing the correct optimisation tool. Reach out and speak to an expert today.