Supply chain health checks should not be seen as one-time events but as an ongoing process to continuously monitor and improve your supply chain’s performance and resilience. The specific timing and frequency of health checks will depend on your company’s unique circumstances and objectives.
Why Conduct a Supply Chain Health Check?
Conducting a supply chain health check is essential to ensure the efficiency, resilience, and competitiveness of your supply chain operations. Most businesses change their focus and priorities from time to time, and it is important to realign your supply chain accordingly. Therefore, a health check is always a good idea to highlight potential supply chain improvements and risks and make sure it supports the overall business objectives.
Here are some reasons why you may need to conduct a supply chain health check:
- A change in management, new ownership, internal reorganisation.
- Inconsistent service levels.
- Poor cost-efficiency.
- Considering implementing new technology or processes.
- To improve efficiency.
- Introduction of a new product
- Carbon reduction.
- Future proofing
By identifying the areas of improvement for a supply chain, businesses can optimise their supply chain strategy, effectively streamlining their business and staying ahead of potential supply chain risks. This gives organisations the ability to remain competitive, efficient and resilient.
Benefits from a Supply Chain Health Check
Disruptions in the supply chain have a domino effect, affecting every point along the way. Successful supply chain management has direct and indirect benefits that support the efficient, seamless movement of information, goods, and services from procurement through final delivery. Some benefits of running a supply chain health check are:
- Identifying and generating areas for cost savings.
- Improving service levels.
- Maximising operating costs and processes.
- Insights for operational improvement
- Giving you cost to serve insights
- Creating cost and performance visibility – giving you control levers
- Incorporating new technology and new ideas
- Planning for growth.
When areas of a supply chain are not performing well, they can incur unnecessary costs. A healthy supply chain produces better service levels as all processes are optimised. Employees can perform better as all logistic issues can be resolved quickly. Conducting a supply chain health check will give businesses the perfect starting point for future growth and new ideas.
What You Should Focus on During a Supply Chain Health Check
Conducting a supply chain health check can be challenging but rewarding because it can offer vital insights on how to overcome weaknesses, preventing future dangers, and optimising profit.
The health check can be either ‘a quick look-see’ high level review or a full and detailed assessment of your supply chain.
Some examples of areas to focus on are:
There are a few key areas within inventory that may need attention. This includes the balance of inventory across the network. Does the organisation have everything deployed correctly and at the right level to manage its inventory? Companies must put enough focus on their inventory management to reduce the amount of slow and obsolete (SLOB) stock. Also post Brexit do you need to have strategic stockholding in both the UK and the EU?
Review all existing planning processes and their effectiveness. Ensure the strategic transport plans are optimised, that the vehicle utilisation is always improving, have efficient sub-contracting strategies in place, use appropriate modes and shared-user networks. Freight costs and driver shortages are currently causing major problems and likely to continue in the foreseeable future so this should be planned for. For more information on this click here
Bisham Consulting can support your supply chain resilience by giving a good understanding of how efficient your existing network is and making recommendations on how to improve. We would look at infrastructure, processes, IT and existing 3PL partners. We take a data-driven, bottom-up approach to improve performance and match data analysis with physical observation to ensure that our recommendations for improvements are built on a firm understanding of the current business.
So, whether you have problems with inconsistent service levels, poor cost performance or inefficiency, or you are thinking of introducing new technologies or processes (such as automation, or a new Warehouse Management System or Transport Management System), Bisham could help to get your supply chain in tip-top fitness for the challenges your business faces both today and tomorrow.