Please note that the number of consumers in the emerging markets will grow from to 4.2 million in 2015. The consumption will be $18 trillion. Therefore, building efficient and effective supply chains is being a key performance indicator for leaders. Using new technology, minimising costs, increasing quality, improving agility, managing risks, delivering on time and collaborating with both suppliers and customers will be key drivers in the global game.
I know that some key practices must be performed to make a high performance supply chain organisation. I will discuss three of them today.
Implement these three practices to make your supply chain operations more effective and competitive.
- Focus on the total cost of ownership. Don’t look at only price. Look at the total cost of the products or services. Keep in mind that only 25 to 40 percent of the total cost is the acquisition cost. Consider different cost parameters such as operating, training, maintenance, warehousing, quality, environmental, transportation, shelf life, competitors, customers and finished product’s value. Cooperate with the suppliers and work together to reduce the total cost of ownership. This must be a strategic mindset!
- Establish appropriate levels of control and minimize the risk and failure. The quality of the products and/or services must comply with the company standards and regulations. Therefore, you have to ensure compliance and minimize the risks. Today, some companies have quality failures in the market. When I was working in the agri/food industry, we have managed a controlled agricultural program to supply cereals, meat, chicken, fish, vegetables and fruits from Turkey. We always checked different parameters and applied total cost of ownership strategy that guarantee the quality and minimizes the risks. Making pressure to the suppliers and waiting high quality is a complex process. You can lose your customer loyalty in one day. Be careful!
- Work with the effective supply chain leaders and professionals.After working intensively in the food and pharmaceutical manufacturing companies, I know that leaders must have strong communication and relationship management skills. Of course, intensive experience and know-how will add great value to the supply chain operations. A truly effective supply chain leader correctly staff her/his organisation and provide alignment, excellence and agility and also focus on value creation.
Make your decision and take action today!