Supply chain optimization is an essential part of running any successful business. This is even more true for courier services. They’re business requires their courier services to be fast, efficient, and affordable.
This can be a challenge to set up, so it’s worthwhile for any potential business owner or investor to understand how to optimise their supply chain for better courier service.
Contemporary businesses should consider optimising their supply chain systems in such a way that the future of the planet is considered. Green logistics solutions have become increasingly popular in part because of a global need to reduce greenhouse gas emissions.
We read optimisation, efficiency, and sustainability as interconnected forces. Together they can improve a businesses daily operations while also helping to build a greener tomorrow.
What is Supply Chain Optimisation?
Supply chain optimisation ensures that the entire process is operating at maximum efficiency without compromising service delivery.
It’s a goal that business owners can achieve through sound business practices and understanding the nitty-gritty of their entire operations.
But it’s more than just minimising operational costs and ensuring the optimal placement of inventory. Some of the factors to consider are:
- Manufacturing costs
- Transportation costs
- Distribution costs
- Fulfilment costs
- Customer service costs
And this list doesn’t even consider the many daily complications that arise whenever a business is in operation.
The 5 Pillars of the Supply Chain
Supply chain management can be separated into the five pillars of the supply chain. These are:
- Value for money
- Effective competition
- Ethics
- Accountability
- Equity
Having each pillar accounted for ensures operational efficiency.
Value for money.
Customers seek value for money whenever they are making informed decisions and purchases. Supply chain companies must make sure that their products are more than just affordable. They need to offer the basic goods and services on offer to ensure customer satisfaction.
Effective Competition.
Businesses operating with the bubble of a monopoly rarely stand the scrutiny of the future. Competition is something that drives innovation, and it’s a great way to ensure optimisation. The best way to improve is to engage in healthy competition with your competition. It’s a sure-fire way to get the blood flowing.
Ethics.
Ethical supply chain management is a must for both established and up-and-coming businesses. Your company image matters when it comes to who or what decisions prospective consumers make. Business ethics also helps to build a more sustainable and trustworthy marketplace.
Accountability
Accountability highlights a business that is open about its operations and its potential mistakes. Supply chain companies that are open about their green logistics strategies, for instance, highlight their environmental goals and how their business is working towards building a greener tomorrow.
Equity
A supply chain system should promote equity and equality across the board. The importance of this should not be understated in an economy like Australia’s. Courier companies must ensure that everyone is treated fairly, from their hired delivery partners to the top of their management team.
What are the 5 basic steps of supply chain management?
But how does a supply chain management system actually work? It’s well and good to discuss the five pillars, but the practical steps must be considered.
Luckily, there are five basic steps of supply chain management. These are:
- Plan: don’t just run head first into a business without having a sound plan.
- Source: get the best people for the job and trust them to do it.
- Make: build a company and constantly seek efficiencies
- Deliver: make sure to provide the best service possible to your customers.
- Return: constantly return to and tweak your supply chain as new innovations arise.
We can explore these steps in greater detail through the use of an example.
Say you’re setting up a delivery platform, like Zoom2u, that seeks to connect independent couriers with deliveries.
Plan
With this idea, you need to put a plan together. This can involve finalising your business plan and adapting your idea into a more actionable idea.
Source
If you’ve finalised your plan, now is the time to start putting the pieces together. Ask yourself questions about the kinds of people you want to work with and how they can help you to achieve your business goals.
Courier service and supply chain businesses require other people, so it’s important that whoever you hire shares your goals and ideas.
Make
Now that you have your plan and systems in place, it’s time to create. Start gaining customers and their trust. The initial few months are an essential time for any business, so be sure to set up systems that are sufficient for longevity.
Deliver
In short, get to work! Make sure that your customers are satisfied with your service and that everything is running smoothly. In our example courier service, this includes making sure that the supply chain is running as required.
Return
A key to optimising a supply chain is to audit the system frequently. This helps you to see what is and is not working. Having a hands-on and proactive approach will ensure longevity and efficiency for your supply chain systems.
12 Supply Chain Optimisation Tips.
Optimising supply chain operations is a great way to make your courier service company more efficient, cost effective, environmentally friendly, and all-round better.
We’ve discussed the basic steps of setting up and running a supply chain operation. Let’s get into the tips and tricks.
Don’t Try to do Everything Yourself
Outsourcing is a very effective way to upscale your supply chain business. Courier services like Zoom2u function off a model of hiring delivery partners. This allows them to streamline the delivery process by having those who are best equipped with certain skills and expertise to focus on what they do best.
Maintain Connections
A business owner never knows what they might need. Having business partners from various different backgrounds and sectors can help bring valuable insights to your company. Maintaining these connections can lead to unexpected benefits in the future, so it’s important to be mindful of them.
Optimise with Technology
The supply chain process can be greatly optimised through the use of technology in a number of ways. Tools like artificial intelligence can help with route and network optimisation, as well as demand forecasting and inventory management systems. The process of optimisation is to create a more efficient supply chain. New technology can do this in a variety of ways, so do not miss out on its potential.
Centralise Systems
A solid centralised supply chain network design process can give courier services a great competitive advantage over their rival companies. Centralised systems allow for supply chain managers to oversee the supply chain operations from a single point. This point can be a virtual network that manages the entire supply chain or it can be physical distribution centres.
Route Optimisation
Route optimisation lowers transportation costs and helps to meet customer demands. It helps to make the business processes more efficient and environmentally friendly. These are customer expectations that must be accounted for during all supply chain processes.
Learn more about Zoom2u’s route optimisation software here.
Green Logistics
Green logistics is a supply chain process of balance supply chain efficiency with environmentally friendly solutions. Together, both can reduce operating costs and help with resource management. Eco-friendly supply chain processes is part of effective supply chain management. More and more consumers are looking for ethically minded supply chain managers.
Provide Quality Service
Supply chain performance must be able to meet customer expectations. It does not matter how your supply chain systems look if they do not meet customer demands. A resilient supply chain provides good quality supply chain services and ideally exceed customer expectations.
Audit Systems
Supply chain managers should constantly work to better understand their business processes through audits. Supply chain design is part plan, part adaptation. A responsive supply chain both tries to control how it operates while adapting its operating costs to the distribution networks. Auditing your systems can help managers better understand their warehouse efficiency, inventory management, storage costs, manufacturing operations, order management systems, and global trade management systems.
Understand Analytics
Working with key performance indicators that seek to forecast demand and supply trends will help to mitigate many common supply chain challenges. The cost of raw materials, for instance, fluctuates, causing major supply chain disruptions. While a manager cannot perfectly predict these changes, they can understand the trends and make more informed supply chain management decisions.
Same Day Delivery
Inventory management is an essential component of supply chains. It can work hand-in-hand with transportation management systems when same day delivery services are provided. While the logistics of setting up these systems might appear complicated, they are worth it. They led to better supplier performance and a far more effective supply chain system. Most sales data suggests that consumers desire fast, same day services.
VIP Services
Bespoken supply chain services can help to attract high paying and reliable clients. This will help to attract a wider range of clients within the courier services. Think, for instance, of offering a tier that, when clients pay more, they will be able to receive a private supply chain management team member who can deal with their unique demands and concerns.
Provide Knowledge
Supply chain management is a complex industry. Companies that just run effective supply chain business processes are missing out on their chance to improve the larger supplier management industry. Consider becoming a provider of knowledge. Teach new entrepreneurs how balancing supply and chain visibility works. These network design processes will create an entire industry geared towards more responsive service for their customers.
Build Consumer Trust
Building consumer trust is a tried and tested business practice. It helps to curb demand fluctuations which, in turn, lead to more predictable sales forecasting. For supply chain courier services, consumer trust means that your customers trust that their package will arrive swiftly and undamaged.
The benefits of supply chain management for courier services should be seen as more than effective services. It entails an industry wide understanding of what consumers are after when they order a package for delivery.
Through supply chain optimisation, courier services can see an increase in sales and a more towards more efficient, cost effective, and more environmentally friendly business practices.
