Supply Chain Optimization

For best results, proactive enterprises use supply chain optimization throughout the entire supply chain, from raw materials to the manufacturing floor through to delivery of the final product to your customers.

Types of supply chain optimization

Localized optimization improves a single function without touching upon other parts of the supply chain. Let's say you want to increase the number of goods shipped by a distribution channel. If you succeed, your trucks will leave the warehouse completely full. However, you will also need to increase your back stock to avoid out-of-stock situations.

This method may work if you want to try out different scenarios to test how they affect other parts of your process. However, you run the risk of causing problems throughout your supply chain if the solution does not work.

Global optimization examines your entire supply chain for opportunities to gain efficiencies without increasing costs exponentially. With global optimization, you balance the many moving parts and consider how each change affects everything else. As with any optimization scenario, the money you save should outstrip the money spent on trying out new processes, our friends at Easyship have compiled some useful tips for getting started with optimizing your Supply Chain Process

You can leverage powerful automation tools in your supply chain optimization strategy. Platforms such as QuickBooks Commerce increase your data visibility and automate repetitive processes to maximize supply chain optimization.

Benefits of supply chain optimization

As a result, you can avoid problems that arise when it comes to tracking those items through the supply chain and maintaining an accurate record up to the point when it reaches the customer's door.

Data-driven supply chain management will give you end to end visibility on the  flow of information, services and goods from procurement to manufacturing and delivery to the end consumer. The benefits of supply chain optimization are plentiful and include:

• Improved Quality: Supply chain optimization transforms quality management by improving the supply chain from raw materials through customer delivery. A focus on quality reduces waste and concentrates on meeting KPIs relevant to every stage of the process.
• Augment supply chain planning: Every element of supply chain planning matters. Optimization increases visibility and promotes transparency into performance at every level. Better data means better forecasts, which improves the accuracy of your supply chain planning process across multiple locations and facilities.
• Competitive advantage: Traditional supply chain management focused on warehouse placement and distribution of goods. Today, supply chain optimization must also contribute to competitive advantage and represent the brand appropriately. Keep the focus on real-time decision support and applications that drive execution.
• Improved supplier reliability: Digital supply chains increase the data you have on each of your suppliers. Supply chain optimization means that you have full visibility into who delivers orders late and who consistently delivers substandard products. Once you can hold suppliers accountable with hard data, you can manage your supplier relationships more effectively.
• Sustainability: There are important environmental and social impacts related to supply chain optimization. Producing goods in a sustainable and ethical way impacts your marketability with today's socially conscious customers.

Supply chain optimization techniques and best practices

To streamline your supply chain management, consider outsourcing some parts of your business. By outsourcing logistics, procurement and even customer service, you can concentrate on the processes that you do best in-house.

Establish communication with your retailers and suppliers. Of course, this is one of the most important aspects of supply chain optimization. Transparent communication with the people who produce and sell your products can prevent confusion and establish goodwill when you need it the most. If you use more than one distribution channel or supplier, this is a critical element to your supply chain optimization strategy.

Keep the focus on technology

It's easy to get caught up in the day-to-day operations of running your e-commerce business. We get that. However, it's important to keep focused on the technology. For retailers, mobile technology brings in direct sales by marketing and providing information to customers and prospective customers. Internet channels allow you to establish community and authority via social media. This is a great opportunity to track trends that can impact your successful product development. Use geofencing and other technologies to offer location-based discounts and rank well among your target demographics.

Choosing the right management software can integrate systems used by different departments to ensure that critical data is available across the enterprise. With the right software, you can combine your inventory, financial systems, sales and marketing in one place. By making this data available in a centralized repository, management software allows you to streamline reporting, data retrieval and security requirements.

Use a multichannel, customer-centric approach

A multichannel approach demands a responsive supply chain that is mobile-friendly, ubiquitous and available to clients and prospects on all their devices and all the places they go to make purchasing decisions. Supply chain optimization must incorporate inventory management that updates all systems in real-time so that customers get the correct information regarding product availability. Using a multichannel approach also makes it easier to correctly forecast future sales and product demand.

Centralizing data helps you understand what your customers want and how they shop. Ensuring that the data you use is up-to-date can help you successfully navigate pivotal decisions.

Final Thoughts on Supply Chain Optimization

Artificial intelligence and business intelligence tools all form important pillars in your supply chain optimization strategy. For example, you could automatically tag vendors and raw materials to better track manufactured goods. Whatever form optimization takes for your organization, remember to consider the impact of different solutions across the enterprise. 

QuickBooks Commerce enables business owners to have real-time visibility into their entire supply chain, and maintain full control of order flow and shipments to your customers.