"Efficiency redefined" through in-house analysis and optimization? One would assume that supply chain optimization is always a huge project with measures that are extremely complex and comprehensive. Well, most of the time they are! The reason for that is that many companies start a profound supply chain analysis only in case of fundamental corporate changes. Moving the company, opening new subsidiaries, expanding the business, growing further or the need to reduce costs drastically are strategic moves that imply a review of the existing supply chain. As long as business is running as usual, companies often don’t see the need for questioning the existing processes, suppliers and conditions. When the shoe pinches, however, long-, medium- and short-term optimization potentials are tracked down and most of the time external supply chain experts get involved in the project. Besides the heavy adjustment screws there are also so-called quick fixes. By that we understand potential that can be leveraged quickly through minimal intervention and minimal cost.
As always, the most important step is a detailed analysis of the existing processes. In principle, companies can draw this overall picture themselves. However, companies hardly have a complete map of their supply chain processes and the investigation of experts can provide a new perspective. But even if experts are involved, we recommend companies to invest ressources in analyzing the own supply chain and seeking for quick fixes from time to time. Those screws that seem to increase efficiency with only little effort can be adjusted on a regular basis and without starting a huge supply chain optimization project with external experts.
For example, a different arrangement of the goods in the warehouse can already lead to increased efficiency. Sometimes it makes sense to reduce inventory. It is also worth looking at the contractual conditions with various suppliers and renegotiating them if necessary. Even if the integration of digital solutions per se would not be assessed as a quick fix, the full or modified use of existing digital solutions could definitely be one that quickly and easily leads to increased process efficiency.
STUMBLING BLOCKS
Of course, there are also limitations when talking about in-house optimization. The most frequent showstoppers are lack of time resources and lack of know-how to carry out an internal supply chain analysis. Recognizing the optimization potential, estimating the necessary resources for implementation and last but not least processing this internally requires a lot of internal menpower.
We often experience that companies start their own supply chain analysis and ask an external team of experts for advice at a later stage. LNConsult has a lot of experience due to numerous successfully implemented projects and can offer a broad knowledge base from industry best practices. Because of this we are able to transfer various perspectives to any other supply chain project.
Maybe we can sum this article up by saying that quick fixes and more extensive optimization measures can (and should!) go hand in hand. Supply chain consultants always ensure that the implementation steps build on each other and that the supply chain efficiency of the company is increased step by step.
Even if a supply chain project is started internally and handed over to supply chain experts at a later stage, immersing yourself in the process landscape is extremely valuable. Mostly, however, it takes an external perspective to recognize blind spots and to really break out of well-worn patterns and allow yourself to think outside the box.
REGULAR CHECKS VS. ONE HIT WONDER
Supply chains are constantly changing due to internal (e.g. product changes) and external (e.g. a supplier who changes a shipping unit) factors. That is why constant monitoring of the supply chain and optimization of the processes is desirable. Our experience shows that comprehensive supply chain consulting can unveil unexpected potential in companies and lead to an increase in efficiency which basically can be translated as considerable economic savings.
An efficient supply chain is something companies should strive for - even if "efficiency” can never be realized to 100 percent. In every project, LNConsult aims to achieve logistical quality above and supply chain costs below the industry average. A project is assessed as successful when no further (large) optimization potential can be identified. Anyone who embarks on the journey and starts to analyze and map the supply chain processes will be able to realize some quick fixes. As soon as the positive impact can be measured one will most likely get motivated to dive deeper into supply chain optimization and will look for the bigger screws that can be adjusted.