Understanding Excellence in Supply Chain Management

by Obella Marie D. Ronsairo and Francis J. Custodio, SEPTEMBER 2021

Since the early 1980’s when Keith Oliver of Booz, Allen, and Hamilton first coined the term “supply chain management,” the concept of harnessing the power of a company’s supply chain to drive business growth has been rapidly evolving. Through the expansion of more comprehensive software and holistic management practices, improved supply chain management techniques have become a smart, yet a still under-utilized tool for today’s most savvy executives.

Excellent supply chain strategies provide ways to move ahead of the competition in an increasingly complex marketplace. To achieve supply chain excellence, organization leaders need to pay particular attention to the details of their infrastructure. Viewed collectively, these details can support a more efficient and effective supply chain management process that can promote more aggressive performance goals across such areas as purchasing, general operations, distribution, and integration strategies.

Today’s best practice methods involve a more integrated approach to the entire supply chain. Taking the time to build a holistic perspective can give corporate leaders the information they need to identify challenges and build solutions to mitigate revenue lost due to redundant or inefficient supply chain methods. From professional networking to achieving specialized training through online courses, executives with an interest in building stronger supply chain management skills have more learning options than ever before.

Using today’s most popular software applications, business leaders can gain keen insight into the details of suppliers, factories, storage and warehousing, distribution and customer feedback. Integrating all these data points and making sharp observations about the flow and patterns of goods and services is at the heart of excellent supply chain leadership development. Viewing management as partners and building open and responsive communication protocols at each step in the process can go a long way to closing the gap between current and potential profit margins. Working with supplier alliances, building better rapport with managers, and seeking more strategic sourcing options can allow leaders to contribute to the positive outcomes needed to stay competitive in a growing market.

Here are examples of how two corporate giants, FedEx and Amazon, have excelled in their SCM processes.

Fed-Ex

Global giant FedEx provides business solutions to fit a wide variety of customer needs. Well-developed communication strategies allow for responsive adjustments to business processes when necessary. Fed-Ex assists clients in scheduling shipping to help them utilize cross-docking strategies and maximize warehouse dollars. In one creative solution, FedEx worked with a U.S. automotive part distributor to essentially create a “flying warehouse.” Renting a permanent storage facility for a long-term contract in Japan was cost-prohibitive for the parts, distributor who chose instead to use FedEx services to fly parts overseas daily. In the end, this solution saved the company money. FedEx has built its own reputation on tight logistics and responsive customer service management practices. They are leading the way for other companies to grow through their example with controlled flexibility and SCM procedures that are able to seamlessly evolve in times of change or uncommon need.

Amazon

The company’s focus is on growth based on, “its holy trinity of price, selection, and availability,” as explained by former Amazon executive John Rossman in his book The Amazon Way. One of the company’s strengths is that they built their own supply management tools from the ground up. As a result, they were able to build a system where communication in real-time is standard practice and making adjustments is inherently part of the way the system works. While other big box giants and mega superstore companies are scrambling to retrofit outdated and disjointed IT, Amazon is efficiently zipping ahead of the competition. Communication in real time means convenience for customers. Orders can be filled and shipped from a variety of locations to maximize efficiency and customer satisfaction. When a process is deemed no longer relevant it is abandoned for more responsive solutions.

Of course, few companies have the supply chain budget of companies like Amazon and FedEx, but the strategies these companies use can be applied to drive growth at any level.

Benefits of Integrated Supply Chain Management

No matter the size of an organization, a more responsive SCM strategy focused on adding more value for the end customer can directly impact company growth. Whether it is integrating current technology to make better use of existing software for tracking and customer feedback, or identifying alternative product sources and shipping routes, staying abreast of SCM best practices and applying innovation is a powerful way to boost corporate growth. Even minor adjustments can lead to strong ROI when it comes to saving purchasing and inventory costs, making shipping services more efficient and addressing customer service concerns head-on.

Just as FedEx and Amazon case studies show, focusing on a comprehensive approach to SCM can result in great products or services offered at the most competitive prices for consumers who are more Internet savvy and product-educated than ever before.

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About the writer:

Obella Marie D. Ronsairo. Loves to feature life and see the beauty of every side of the stories. Have been with the newsletter team for almost two years since becoming part of the MPTSouth family. Gained a lot of fun, experience and knowledge through this growing team and helped her to develop more of her skills in writing and creativity.

Francis J. Custodio. Is a Industrial Engineer who loves to think outside the box.  Also like the saying “Work Smart not Hard”. Always curious and that curiosity led him to join the Southlink Newsletter. Loves to know “what make things tick”.

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