Teamwork maximises supply chain efficiency

With the ever-increasing movement towards online business, all focus has shifted to optimising the supply chain for greater speed and efficiency.

The key, according to management consultancy Logistics Bureau, lies in integrating all elements of the supply chain so that the companies involved in the process are operating as a single network, or trading exchange.

Logistics Bureau Director Maurice Sinclair explains: Integration is about aligning a firm’s logistics operations with other companies, such as suppliers and customers, across its supply chain.

“Of course, the more simple you make your supply chain, the less chance there is of something going wrong. The need to integrate the supply chain by creating a seamless relationship between suppliers, customers and our own logistics operations is tantamount to achieving cost and service improvements.”

Sinclair uses the example of a baked beans manufacturer to illustrate how a number of companies can integrate across the supply chain.

“The number of players in this supply chain could range from the retailer, perhaps a food distributor, the baked beans manufacturer, the labeling company that supplies labels, tomato sauce company, navy bean supplier, the can maker, the steel maker, the iron ore supplier and so on. The secret is to create the right context for problem solving exercises that are designed to reduce cost and/or improve service.”

While return on investment may be high, the process relies heavily on business process re-engineering and creating solutions that challenge traditional ‘us-and-them’ approaches.

Working as a group of closely knit interdependent organisations is far more effective than trading as a single entity. This type of change demands that a business is willing to share information with its partner organisations. It also requires shared technology – perhaps an extranet.