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Tag: distribution

Maximise Transparency across your Supply Chain

Although the current economic environment in Ireland is slowly gaining ground according to experts, businesses throughout the nation are still working to develop new methods and internal procedures that will stimulate their financial gains and produce long-term benefits.

Conventional methods used for batch tracking and traceability help identify problems from the point of sale, working backward. But, that does little for anticipating or eliminating the complications before they occur.

Fortunately, new tracing capabilities are transforming internal procedures and maximising the transparency of the supply chain by allowing organisations to embed every detail of the product’s life cycle into each specific item record. This advanced type of provenance and traceability data can then be utilised to analyse quality controls, safety, and reliability with heightened accuracy. Moreover, it helps to maximise your company resources, whilst simultaneously strengthening your supply chain performances.

However, before you can introduce new technology tools, there are a few things to consider. These steps can help you develop the foundational groundwork required within your company dynamics, so that your enterprise resource planning system will achieve its maximum potential.

  • Initiate a Strategic Planning Process

Without clearly defined goals and a system for achieving them, improving transparency along your supply chain will remain in the realm of the subjective. Although you could hire expensive consultants to review your current management procedures, examine your floor layout, and create costly, and complicated overhauls, for most production and distribution model businesses, third-party consultation simply isn’t necessary.

Initiating a strategic planning process simply requires opening the channels of communication between your staff members and fostering an environment that rewards innovation. Logically speaking, who knows better what is working and what isn’t in your company than your employees who deal with the situations every day?

Creating an atmosphere that welcomes employee suggestions and seriously considers them helps establish a sense of unified purpose that will engender positive innovation.

  • Eliminate Communication Barriers Between Departments

Maximising transparency requires a free flow of communication and information within your organisation. Data flow charts can help you visualise obstructions, but the most important point to remember is to foster sharing among your departments. For instance, placing importance on regular, consistent counts, which get transferred to specific sales members; allocating specific single user subscriptions that designate task ownership for heightened accountability.

This type of departmental communication helps improve transparency across your supply chain, because essentially, every process involved, from the point of sale to replenishment, impacts your company’s performances.

  • Integrate Data into a Comprehensive System

The biggest limitation to supply chain transparency is working with a myriad of separate planning, scheduling, customer, vendor, and accounting software programmes. It’s almost impossible to create the supply chain visibility you need to successfully compete in today’s global marketplace without total data integration.

However, there are many affordable systems available that offer the framework for data integration across business channels, and include sophisticated procurement, inventory, and distribution management such as:

  • Real-time employee access to purchase requisitions and orders
  • Enforcement of purchase order approval protocols—eliminating quality control problems from substitutions or inferior product replenishment
  • Comprehensive inventory costing methods for improved analytics
  • Packaged shipping integration with each point of sale

Improving your supply chain transparency with a comprehensive system offers long term benefits. With the ability to benchmark and establish standardised methods for sharing data, it helps to promote a better employee understanding of the needs and challenges your company faces. Moreover, data integration delivers prescriptive and predictive analytics across the entire length of the supply chain for enhanced decision-making.

Contact us today to see how Sage 200 can help YOUR business

How big a role does distribution play in maintaining your bottom line?

Finding actionable methods that control costs is a crucial component in business operations. Whether your company serves the general public, such as in retail or food service, or you transact the distribution of goods.

However, in a manufacturing or distribution model, controlling operational costs is more complicated. Separate and/or multiple warehouses, third party shipment orchestration, and other supply chain maintenance tasks are so inter-related that it’s often a challenge to differentiate exactly which areas need improvement.

For companies in Ireland that operate warehousing and distribution as part of their business structure, the recovering economic climate makes it doubly important to control wastes in these areas. Even seemingly harmless inefficiencies can compound over time and dwindle your already slim margins into nothing.

Therefore, it’s important to know exactly how big a role your warehouse and distribution processes play in maintaining your healthy bottom line.

The Waiting Is the Hardest Part

Many businesses perform analysis procedures quarterly, or even yearly. But, in today’s mobile marketplace, that type of reporting can quickly spell disaster.

Waiting for performance data is cost-prohibitive. Even if your reports are generated on a monthly basis, the wastes that can occur before you become aware of them can have a big impact on company profits.

According to a recent survey conducted by Warehousing Ireland, “40% of finance professionals said their firms relied almost exclusively on manual or spreadsheet methods to keep track of the business… 30% of managers complain of a lack of integration between internal systems; around a fifth complain of poor integration and communication with suppliers and with distribution partners.”

That kind of inefficiency in performance tracking can equate to huge losses in your company’s bottom line.

Supply Chain Woes

Maintaining inventory is costly. Every day that you house an item at your warehouse facility, holding charges (soft costs) accrue. And although, these costs may seem marginal, they are almost entirely responsible for any gaps between your projected operational costs and your actual costs each year.

Inefficiencies in your supply chain procedures can compound quickly. The most common problems include:

  • Lack of transparency across company departments
  • Sporadic, inaccurate or misleading stock counts
  • Lack of actionable vendor management programmes
  • Poor customer relationship management protocols

Poor communication between your administrators and floor personnel can result in multiple/duplicate purchase order issuances. The subsequent overstock then becomes subject to high shrinkage rates, or stock out situations engender costly rush shipments.

Lack of vendor management planning can also generate labour wastes if replenishment shipments aren’t scheduled precisely.

Warehouse Layout/Stocking and Workflow Constraints

Disorganisation in stocking and workflow designs at your warehouse produce a number of wastes. Every time an employee has to back-track to pick an item for the same order, it creates unnecessary expense.

Moreover, poor workflows generate lengthy lead times. The order takes longer to process and there’s a greater chance for order inaccuracy.

Bottom Line

How important is the role of your warehousing and distribution to your bottom line? Massively. So important that it often represents your entire profit margin.

Consider some benchmark metrics tabulated for the top 20 percent of global distributors by WERC:

  • Distribution costs as a percent of sales are less than 1.6 percent (most other companies range from 2.9 percent to 8.9 percent and more)
  • Distribution costs per unit shipped are less than €0.28 (most other companies range from €0.77 to €10 and more)
  • Days on hand inventory is less than 15 (most other companies range from 30 to 78 and more)
  • Shrink as a percent of total inventory is less than 0.1% (most other companies range from 0.2 percent to 1.8 percent and more)