10 Supply Chain Improvement Essentials for Your Company

An efficient supply chain strategy is one that takes every aspect of your supply chain into account, from inventory management and warehouse design to freight tendering and transport optimisation. Let’s look at some of the best ways to make your supply chain more efficient.

What is Supply Chain Efficiency?

Supply chain efficiency focuses on improving your processes whilst also reducing costs. An efficient supply chain is one that makes sure that every resource across your entire operation is watertight, avoiding waste and maximising profits.

For your supply chain operations to run smoothly, there are some things you need to consider. Transparency or end-to-end visibility is key, as you can’t fix your supply chain processes without knowing what the issues are.

You also need to ensure that your entire supply chain works cohesively, as well as being resilient to any potential changes or disruptions. A responsive supply chain can help to ensure that you always meet customer demand, even if you face inevitable obstacles.

And for supply chain improvement specifically, using the right technology in your business can give you the competitive advantage over other companies. Many companies are undergoing a digital transformation, switching from manual processes to automating routine tasks.

As mentioned, there are various aspects to your supply chain, and part of effective supply chain management is making sure that they all work well together. Here are 10 things you should focus on to improve supply chain efficiency and performance:

1. Inventory Management

The key starting point is implementing proper ABC analysis, and you need to look at it from multiple angles. It’s not enough to just categorise by product groups; you’ve got to dig deeper into line item analysis. When you get this granular analysis right, you’ll start seeing opportunities for optimisation that were hiding in plain sight.

Inventory management isn’t just about classification; it’s about getting your reorder points, minimum order quantities, and pack sizes perfectly aligned with your business reality. And the foundation that holds all of this together is your master data.

Even if you invest in sophisticated inventory management systems, if your master data isn’t accurate, you’ll fail. When you get these elements working together — proper ABC analysis, optimised order parameters, and clean master data — that’s when you’ll see your inventory management transform into a smooth-running operation.

2. Transport Fleet Optimisation

Fleet optimisation is one of those areas where companies leave money on the table. In my experience, the tipping point is around 6 vehicles — that’s when the complexity of manually managing your fleet starts to outweigh the cost of proper routing and scheduling software. If you’re trying to manage 6 or more vehicles, you’re probably missing optimisation opportunities that a good software system would spot instantly.

When we get to larger fleets — especially 20–30 vehicles — the savings potential gets even bigger. When you’ve got a fleet of that size, even a 5% improvement in efficiency will translate to big annual savings.

3. Supply Chain Strategy

Within supply chain strategy, it’s important to realise you don’t need an advanced document to transform your operations — a simple document is enough. More important than the depth of your strategy is its clarity: clear objectives, measurable KPIs (key performance indicators), and achievable targets. When you get these three elements working together, that’s when you start seeing real, sustainable improvements in your supply chain performance.

4. Warehouse Design

With warehouse design, some companies fall in love with a building first, then try to make their operation fit into it. It’s important to start with your product and understand your storage and handling requirements first — understand exactly how your inventory flows, what your peak seasons look like. Only then can you calculate your ideal footprint and height requirements.

If you design from the inside out, everything else falls into place: your picking efficiency, your storage density, your labour productivity — it all stems from getting these fundamental decisions right at the start.

5. Logistics Outsourcing

Finding the right 3PL partner takes time, and whilst sometimes it just works, it’s worth maintaining a proper selection process in the long run, as if you try to take things too quickly, eventually the shortcuts will show.

With modern logistics outsourcing, we’re seeing a change in how companies approach the tender process. Instead of just asking potential partners to quote on your current operation, you’re asking them to reimagine it with you (collaborative tendering). It’s important to remember that when you document your needs, do your market research, and run a proper evaluation process, you’re not just finding a service provider — you’re finding a partner who can help evolve your business.

6. Freight Tendering

With freight tendering, most companies are focused on rate negotiations, but if you’re only looking at the rates you’re paying per pallet or per tonne, you’re missing an opportunity. This is why it’s important to map out your entire freight operation.

And when you start mapping out all your carrier interfaces and really understanding your service requirements, you often find little opportunities for improvement that have nothing to do with rates. For example, in some instances simply adjusting delivery windows can save more than you can through rate negotiations.

7. Performance Management

Having just three key metrics at each organisational level is a good idea for performance management in logistics. A CEO doesn’t need to know every single picking accuracy percentage in the warehouse — you simply need the high-level metrics that tell you if your supply chain is healthy.

You also need to ensure that you’re cascading these metrics through your organisation. Your warehouse supervisor’s three KPIs should directly support their manager’s three KPIs, which in turn feed into the director’s metrics. You can also use benchmarking data to understand what “good” really looks like in your industry.

8. Distribution Network

Distribution networks need regular health checks to stay healthy. In my experience, get used to doing these health checks every couple of years — it’s like giving your network a regular MOT. It’s also important to make sure that inventory doesn’t start to pool in certain facilities while others run dry, which is where distribution network design comes in — it’s not just about where you put your warehouses; it’s important that you stay on top of changes in your customer base, your product range, and your market channels.

9. Sales and Operations Planning (S&OP)

With S&OP, it’s not just about having meetings — you need everyone in the company — sales, operations, finance, supply chain — to be singing from the same hymn sheet. You also need to focus on getting true ownership of the sales forecast, which isn’t always easy.

You should be running a regular monthly cycle with proper stakeholder engagement to check your business — you’re not just looking at numbers, you’re making decisions that will impact your success three, six, even twelve months down the line. You need to make sure every stakeholder sees clear value in participating, so make each meeting actionable.

10. Customer and Product Profitability

Finally, start digging into your cost-to-serve analysis at a granular level — per order, item, customer, region. What we found was shocking. Once you have this detailed understanding, you can start making really smart decisions about your pricing strategy, service levels, and resource allocation. It’s not about cutting off unprofitable customers — it’s about understanding exactly what it costs to serve them and adjusting your approach accordingly.

You also need to make sure you address profit leakage. It’s true that some companies lose money on up to 78% of their orders, which may seem unrealistic to read, but it is possible to address these issues systematically.

When you look at these ten key areas — from inventory management to profitability analysis — they’re all interconnected parts of your supply chain, and if you improve one area, it often has an effect on the rest of your logistics processes. An efficient supply chain isn’t just a nice-to-have — it’s key to sustainable growth and profitability.