What Are Supply Chain Best Practices? (With 12 Examples)

15 Best Practices for Supply Chain Management
  1. 10 Best Practices for Supply Chain Management. …
  2. Set up a supply chain council. …
  3. Establish a supply chain structure. …
  4. Leverage technology. …
  5. Create alliances. …
  6. Focus on the total cost of ownership. …
  7. Strategically source suppliers. …
  8. Move contract management to the supply chain.

One of the most important yet underappreciated engines of global business are supply chains. Consumers wouldn’t have access to the products and services they require without them. Effective supply chain management is highly valued by global organizations, with 57% of businesses believing it gives them a competitive advantage, according to GEODIS.

This article will explore global supply chain best practices for retail, including a discussion of 11 supply chain examples, for aspiring and current supply chain managers to learn what it takes to succeed in the field today. This article will provide examples of supply chain processes and supply chain diagrams, as well as answers to questions like, “What is a supply chain?”

Supply Chain Management Best Practices | AIMS UK

What are supply chain best practices?

Supply chain best practices make sure products and services are delivered to customers using tools and techniques that are readily available in the workplace. Success frequently necessitates a cooperative work environment between employers and employees. Each step can function efficiently and deliver goods and services on schedule by using supply chain best practices.

List of supply chain best practices

Different supply chain procedures may be used by various businesses worldwide to improve effectiveness. The following list of 12 best practices can help you build a solid foundation for supply chain success:

1. Creating a team of young supply chain professionals

To manage workplace operations, it’s crucial for some organizations to hire qualified supply chain professionals. To help with this, some organizations partner with universities. To achieve this, they offer the students internship opportunities that aid in educating and preparing them for a future career in supply chain management.

Young professionals can be attracted and given career development opportunities in order to encourage them to remain with the business longer and boost retention rates. Rotation schedules into different teams or units can also help employees establish a solid foundation by giving them the chance to gain knowledge from various departments. As they gain experience, they will be able to add more skills to their repertoire and apply them to their work.

2. Collaborating in the workplace

When a company’s teams are isolated from one another and don’t interact much, production efficiency can suffer. Managers and workers may decide to implement a collaborative framework for the workplace to prevent this. They can accomplish this by designating a specific position to coordinate the various teams An organization may experience a decrease in problem-solving time, a quicker onboarding of young supply chain professionals, and an increase in production through workplace collaboration.

3. Building and maintaining relationships with other suppliers

Building and upholding a strong relationship with other suppliers can contribute to both businesses’ success. For instance, if you’re considering forming a partnership with another supplier, it might be helpful to look for one who shares your values and objectives. Due to having a specific supplier available, this may result in savings or improved supply reliability.

4. Diversifying relationships with suppliers

Its beneficial to consider alternatives to one particular supplier. Delays among suppliers may be brought on by unforeseen weather conditions, import and export difficulties, and a variety of other factors. Even though it can be difficult to anticipate when a delay will occur, a business can take preventative measures to lessen the effects of delays.

Try to keep a positive working relationship with your suppliers and keep lines of communication open. By staying in touch frequently, you can anticipate delays and give a company time to look for alternatives. You can still satisfy customer demand by keeping good relations with multiple suppliers because of their supplies.

5. Buying supplies in bulk

Buying supplies in bulk can help to reduce costs effectively. Additionally, being aware of economies of scale enables you to assess the historical demand for various departments as necessary. The organization can be protected from price increases by knowing the past trends in demand and price changes in the market.

6. Planning for future demand

A difficult setback with supplies can result from having too much or not enough of a particular item. An organization can help prevent waste and the ensuing loss of revenue by forecasting future demand. For instance, supply chains may increase demand at certain times of the year. If the company can meet this demand, customers will be impressed, and profits will rise. An organization can use its preventative planning to avoid waste and extra costs from storing excess items if demand declines.

7. Implementing an optimized inventory

Inventory optimization and demand forecasting can be key success factors for businesses. For instance, with demand forecasting, a company attempts to forecast the levels of demand they should anticipate over a certain period of time. Once this is complete, the supply chain can use effective inventory management to make sure they can meet the anticipated demand levels at every stage of the given timeframe. A key component of effective inventory management is making sure there are enough items on hand to satisfy projected demand.

An organization can more easily align its list with supply chain goals with an optimized inventory, such as cutting down on order-to-payment delays, improving document management, and lowering total cost of ownership.

8. Establishing and monitoring performance metrics

To track and evaluate your supply chain’s performance, it may be useful to establish key performance indicators (KPIs). For instance, you might take into account a metric to assess the quantity of flawless orders, the overall financial effectiveness of your supply chain, or the quantity of anticipated sales. An organization can actively monitor how well they are doing, quantify their performance, and make changes that can increase efficiency by establishing these metrics.

9. Ensuring compliance with laws and active risk mitigation

Your supply chain team members may want to routinely review procedures and laws to maintain compliance and efficiency as well as to make sure you are up to date with any changes to local legislation where you operate. This can help eliminate any potential delays, thus improving performance. Additionally, it can speed up operations while lowering the likelihood of theft, fraud, demand spikes, and other problems.

Critical steps in risk reduction throughout the supply chain include the identification of all risk factors, assessing the likelihood of their occurrence, and calculating the economic impact of an incident. Prioritize risk control to aid in proper monitoring and preventative measures.

10. Automating the order-to-pay process to save time

When a customer places an order until the supplier receives the final payment, the order-to-pay process includes all of those steps. Usually, a successful delivery of an order necessitates the efforts of several organizational departments. These departments’ inability to work together effectively can result in significant time delays, inconsistent data, and other problems.

To prevent this, some businesses may decide to automate the entire procedure by utilizing a single platform in charge of every stage of the order fulfillment process. This includes everything from vendor management to the last payment.

11. Using the total cost of ownership to make decisions

Total cost of ownership (TCO) is the term used to describe all costs throughout the supply chain. This includes the cost of procurement, transportation and warehousing. Focusing on this area is crucial because it enables you to make data-driven decisions. For instance, you might believe that a delivery partner’s discount for large orders would result in a lower TCO. However, after examining the cost of storing this additional supply, you might discover that doing so would be more expensive. It might not be wise to proceed with the purchase in this situation.

12. Using a centralized document management system

Some supply chains use several digital and physical documents regularly. Bills of lading, inspection reports, customs documentation, and purchase orders are all examples of this. It can be difficult to manage all of these documents because they may involve various departments from an organization. A decrease in production and a loss of revenue can result from problems like inconsistent data and poor communication.

Utilizing a centralized document management system might be a smart move. Due to the ease with which team members and stakeholders can access information from a single source, this can help you manage supply chain documentation. Additionally, this can aid in avoiding data inconsistencies and enhancing communication, both of which can aid in enhancing production.


What are the five 5 aspects of supply chain?

There are five main components of supply chain management: planning, locating raw materials, manufacturing, delivering goods, and returns.

What are the 5 R’s of supply chain management?

Four key components make up supply chains: procurement, operations, distribution, and integration.

What are the 7 R’s of supply chain?

Companies are concentrating on reverse logistics, the final and most underutilized frontier for supply chain optimization, in an effort to squeeze out more efficiencies and cost savings from the supply chain. The five R’s of reverse logistics—returns, recalls, repairs, repackaging, and recycling—are being streamlined as they go.

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