9 Questions To Ask About Your Supply Chain

There are certain questions that you should ask about your supply chain if you want to maintain alignment with business goals along with efficiency. These 9 questions will better help you determine where to go to improve your supply chain for better success.

1. Does the supply chain have strategic importance?

Sometimes a supply chain doesn't hold the same level of strategic importance as it does for other organizations. However, depending on the steps throughout your supply chain, there are some benefits to answering this question.

If your supply chain is strategic, you can benefit from:

• Boost Customer Service: Knowing where product comes from, where it goes, how it gets there and when keeps your customers happy without any extra personnel power or costs on your part. It's a win-win for your customers and your pocketbook.
• Reduce Costs: Outside of personnel costs, your production and purchasing costs can decrease if you can tell where your product is, what the demand for it is and how much you'll need based on demand, saving you money down the road when your supply chain already has what it needs in store.
• Increase Cash Flow: Getting your products to your customers quickly and cost-effectively means you can bill them quicker, ensuring you have a healthy flow of profit streaming in when your company needs it most.

2. Has the supply chain undergone strategic development?

One of your beginning questions should be how the supply chain has been developed, and determine whether the supply chain went through strategic decision-making processes, or if it naturally evolved. Many businesses unfortunately find that their supply chain wasn't consciously developed. Instead, it developed autonomously and now strays from their business strategy.

If you answered no to this question, start by developing a supply chain management plan in reverse. How does product get to your customers? How does it go from the manufacturer to the warehouse to the store? What technology is used? Then go back and see how these answers line up with your business goals.

3. Is quality embedded in the supply chain?

Ideally, the quality of your service or product should be integrated in your supply chain operations. It’s important to regularly check for quality at every stage throughout the supply chain, or you may find yourself making costly corrections later with unhappy customers.

Break out the steps of your supply chain and use quality improvement cases to examine where a quality issue could arise and how it can be fixed seamlessly so your customers remain happy and are affected minimally. Check out our 5-step quality process for ideas.

4. Are the right people in the right positions?

Similar to the development of the actual supply chain, many companies don’t place a high priority on the organization of functions within the supply chain. Even larger organizations are often satisfied with supply chain directors who don’t have actual experience or knowledge regarding supply chains.

If your supply chain leaders don’t have a true background in the field, you may need to review the importance of your supply chain or even make changes to the management staff. Outsourcing supply chain management to experienced staff can be a good idea in many cases.

5. Where are there risks?

Every supply chain will have individual risk points. However, you need to identify where they are and implement a strong backup plan. For example, material in the supply chain may be at risk of becoming unavailable to suppliers, and maybe having an alternative supplier or material is ideal.

6. Are we using the appropriate incentives and metrics?

You should always look at the specific metrics and KPIs, or key performance indicators, in your strategy. First determine if those combined with incentives support business-wide strategies or if they’re more inward-oriented to keep the company divided into silos. This comes down to keeping business strategies aligned with supply chain strategies.

7. Are supply chain and business strategies aligned?

Oftentimes businesses will keep supply chain strategies and business strategies disparate. For example, there may be a growth strategy in place for the company while the supply chain suffers from an aggressive cost-cutting strategy that together fail to meet your customers’ needs.

If you find misalignment between business and supply chain strategies, you may need to make some adjustments accordingly. Examples could include:

• Goal is to branch out into a new geographic territory, but your supply chain does not have the capacity to expand. This could drive your costs skyward.
• You could be aiming to increase the volume of product sold, but your supply chain falls in quality at step 3 and leads to unhappy customers.
• Goal may be to secure a large contract with a certain number of companies, but your supply chain doesn't have the manpower to handle larger contracts.

8. Is the supply chain optimized and efficient?

Many supply chains are complex and develop over a long period of time. To keep the supply chain efficient and organized, you should make sure the supply chain is consistently mapped and analyzed. This will lead to you readily reducing inefficiencies or any quality issues (see question 3 for more info).

9. Does the supply chain allow room for change?

Supply chains are dynamic and will need to undergo alterations to remain effective and meet business demands. As a result, it’s important to make sure that these changes aren’t hindered by overly restrictive procedures and policies.

By asking these questions regarding their supply chains, you can benefit from a supply chain that continually works for them and meets their business goals.

If you need more help analyzing your supply chain, let us know! We'd be happy to help.