Supply chain optimization means ensuring that the performance of the supply chain is at the optimal level. Optimal level of performance implies best level of performance possible. One of the initial steps in supply chain management is inventory management. Businesses can make their inventory management more efficient and effective by using tools like Six Sigma, Total Quality management, kaizen and lean manufacturing. There are many training consultancies in India that can help businesses in adopting and implementing these tools.
The supply chain extends right from the point of origin to the point of final destination. Every step of the supply chain should be monitored to identify points of inefficiencies. Improvement strategies should be devised and implemented so as to eliminate these inefficiencies. The improvement strategies should be shared with supply chain partners like suppliers and distributors. A mindset of continuous improvement is required for achieving supply chain optimization. This mindset of continuous improvement is characterized by high degree of flexibility.
Clear performance metrics should be established with regard to the supply chain. These performance metrics should be shared with supply chain partners. The workforce involved in supply chain management should be adequately trained and made aware of the key performance metrics of the supply chain management.
A lot of electronic data interchange takes place between the supply chain partners during the course of the supply chain. Those supply chain partners should be chosen who have the capability for electronic data interchange. Optimization of supply chain cannot be achieved without optimization of the information flow across the supply chain.
The implementation of Lean philosophy across the supply chain can make it compact. Businesses should try to keep supply chain as compact as possible because it is easier to monitor and manage such a supply chain. A compact supply chain is also more flexible and agile. Flexibility and agility in supply chain makes it possible for a business to reduce its inventory needs. Lower inventory results in cost savings for the business.
Implementation of Kanban philosophy makes supply chain agile and flexible. Kanban is a philosophy of managing logistics keeping in mind the production needs of the company. The implementation of Kanban in logistics management can help a business implement Just-in-Time (JIT) manufacturing. JIT ensures that raw material is received only when it is required in production and final products can be delivered as soon as customer demand comes. JIT minimizes the inventory requirement of the business and enhances operational efficiency.