How to Align Supply Chain Capacities with Business Priorities

There’s no such thing as the “perfect” supply chain model. Every business has its own unique set of challenges, sunken costs, and competitors—all of which demand adaptable, industry-specific supply chain solutions.

Some successful supply chain managers prioritize speed and efficiency. Others aim to reduce redundancies, errors, and overall cost per unit. Others still work to create flexible supply chain management systems that can respond to shifting demands, regulations, or policies changes in real-time.

While the methods may differ, the ultimate goal of every supply chain remains the same—optimizing operations to better drive the company’s competitive corporate strategy. Here are a few ways to create smarter supply chains that align capacity with nearly any business priority to fuel strategic growth.

How does the supply chain help a company compete?

Corporate strategy is, first and foremost, a declaration of how a company plans to be better than its competitors. To build a supply chain that can accomplish this market leadership, companies need to clearly define their strategy with specific goals.

These goals need to be measurable via real-time metrics and KPIs that can be gathered from the existing supply chain whenever possible. Accurate reporting on these metrics can provide valuable feedback on how well core strategies are being implemented and where changes and improvements need to be made along the supply chain.

These strategic goals and important metrics need to be communicated throughout the company on a frequent basis to keep strategy front of mind during daily operations.

What are the strengths of the existing supply chain?

The simplest way to evaluate the strength of a supply chain is by comparing performance to existing corporate objectives. In other words, how exactly does the current supply chain accomplish existing strategic goals? And more importantly, how does the supply chain help the company differentiate itself from competitors?

Some possible metrics to consider include:

  • Perfect order rate (relative to industry leaders)
  • Inventory turnover
  • Gross margin return on investment (GMROI)
  • Overall and regional market penetration

Asking these questions can help managers pinpoint specific areas of the supply chain that are vital if the company hopes to remain competitive. Tracking strategic KPIs can also determine areas with the highest immediate ROI for strategic investment.

Supply chain strategy shouldn’t be developed in a vacuum

Aggressive corporate strategies are great—but only if they actually align with real supply chain capabilities. After evaluating the strengths (and weaknesses) of the supply chain, it’s important to address overall supply chain design relative to business priorities.

Optimizing supply chain networks and locations for quicker transportation, automated compliance tracking, and real-time reporting requires different tools than optimizing for faster response times or perfect order rate.

One size doesn’t fit all. Designing a supply chain around a specific goal—like cost efficiency, flexibility, or responsiveness—will require different metrics, overall organization, and personal with the appropriate skills.

Let corporate strategy drive supply chain design and investment as early as possible for the best results. And remember, that strategy can change a lot faster than supply chain capacity. It’s crucial to have ongoing conversations with key stakeholders to ensure priorities remain feasible and fully aligned.

Finding the strategy in the numbers

A finely tuned supply chain can be the primary driver of successful corporate strategies. From lowering costs and increasing efficiency to enabling real-time tracking and reporting, CTSI-Global’s industry-leading transportation management system (TMS) and business intelligence solutions can be the link between strategy and your supply chain.

Our suite of customizable tools can help companies of all sizes drill down into every inch of their shipping, storage, and carrier data for competitive insights that drive agile strategies. And with a single, unified TMS solution integrated across the entire organization, companies can operate knowing that each link in their supply chain is aligned—maximizing every possible opportunity for competitive advantage.

Ready to transform the supply chain from a sunken cost to a major strategic asset? Contact us today.

Reader Interactions