5 Supply Chain Inefficiencies That Are Often Overlooked
The supply chain is tricky to understand, sometimes leading to small problems that become significant issues when overlooked. These seemingly small setbacks and mistakes can create a ripple effect in any company, preventing it from achieving success.
Here are five issues that a company can quickly address to yield better results and improve customer and worker satisfaction.
1. Not Utilizing Data to the Fullest
Logistics professionals can expect to receive data that helps them analyze how well the supply chain is performing. These analytics influence everything about a company, including how future adjustments may affect consumers’ views of the business.
Without utilizing analytics, a company can miss out on faster supply chain routes and improvements that could potentially change it for the better. Even a 1% increase in customer satisfaction can decrease the overall cost of sales by around 3%, though the specifics depend on the industry.
How to Fix It: This fix is an easy one to implement. A company can put the customer first and share its performance data with consumers, allowing them to see every step of the process. At the same time, logistics professionals should make sure they analyze all data available and come up with solutions that improve overall time and customer satisfaction.
2. Lack of Transparency
When communication doesn’t happen as it should, people down the line get confused. They may not know the target time to arrive at a certain location or where individual trucks in a fleet are. Communication is essential to make a business a well-oiled machine.
For example, not many people can handle the early mornings and careful driving truck drivers face every day. Other employees should step into drivers’ shoes and understand it from their level before judging performance. Working with empathy is where communication can come in handy, especially when solving small disputes.
How to Fix It: The best way to rectify this issue is to establish a clear communication channel. Encourage others to share when things aren’t going exactly as expected on their end. That way, the entire supply chain will know what to expect and what might delay their own processes.
With proper communication, everyone has time to prepare for any setbacks and try to make up time in their own way. A fully transparent workplace is an efficient workplace where everyone feels supported and ready to further the company’s mission.
3. Fleet Idling
Fleet idling is a waste of time and resources, which can negatively affect the environment as well as damage a steady supply chain. A chain should meet customer expectations while minimizing cost as much as possible, but idling means that a fleet is not moving — thus adding more time to the chain. Wasted time is wasted money.
Just some of the drawbacks of fleet idling include the following:
- Unnecessary burning of fuels, leading to a larger fuel budget
- More greenhouse gases in the atmosphere
- Longer times from Point A to Point B
- Decreased customer satisfaction
- Possible fines, depending on the idling location
How to Fix It: Luckily, idling can be mitigated through the right measures. Logistics professionals can use trackers to understand where an individual truck is and if it’s making time well. In addition to motivating the driver, it can also provide useful data to the company regarding supply chain routes.
The company can then use this data for future fleets, including how or when to educate drivers on how idling affects the company. This extra education can help drivers defeat those embedded driving habits that might lead to greater idling times. Reducing idling time can also improve the performance of fleet vehicles, which can save even more time and money.
4. Reactivity, Not Proactivity
Proactivity has a business’s best interests in mind at all times. It thinks of the future and how today’s decisions can affect a supply chain or a company months later. Reactive management is just the opposite — it’s created at the last minute and lacks careful consideration. These decisions reflect a manager’s reaction rather than their actual knowledge, either because the decision was created out of fear or on a time crunch.
When employees experience a setback, it’s natural to react with emotion. People can be greatly influenced by the emotions of people around them, meaning that just one person in the supply chain might influence a manager to react on impulse if something negative happens. However, though impulse decisions may lead to quick fixes, they can be costly for a company if they create more trouble in the long term.
How to Fix It: Proactive management is one of the greatest investments a logistics professional can use when managing their fleet. With proactive management, supply chain surprises will never be a setback. Make use of just-in-case measures that can be implemented in an instant if something goes awry. That way, the company won’t have to worry about paying extra to deal with the fallout of a quick fix that does more damage than good from a decision rooted in reaction.
5. Bad Warehouse Management
The warehouse is where it all begins, so it’s no surprise that some supply chain issues can be linked back to ineffective warehouse management. It’s a critical part of the process, and if things aren’t organized or readily available, a company might see delays in its fleet.
How to Fix It: A company needs to think critically about the type of hire they bring aboard for this role. A warehouse manager is supposed to keep things moving smoothly and minimize the number of issues the supply chain should run into from the very beginning.
Having a warehouse manager take on more responsibilities, such as making sure items are actually in stock, as an automated system won’t always indicate whether they’re out of stock, can help keep the warehouse under control. In the end, proper management and clearly laid out processes can help a warehouse manager increase customer satisfaction.
Manage a Supply Fleet Like an Expert
Logistics professionals and fleet managers should always be looking for a way to improve their times and processes. Some easy ways to improve include eliminating room for miscommunication and errors, as well as proper education of team members. These mistakes are some of the easiest to fix but often go overlooked.
When a company adjusts how it runs, it may see improved processes and overall customer satisfaction. All it needs to do is analyze where there’s room for improvement, and implementing changes is easy.