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Supply Chain

12 Steps to Improve Your Supply Chain Processes: A Guide for Beginners

Julien Broucke
January 3, 2023
min read
Business process improvement strategies for optimizing efficiency and effectiveness in supply chain management.

Are you looking to improve your supply chain processes but not sure where to start? Don't worry, you're not alone.

Many businesses struggle with streamlining and optimizing their operational processes, but the good news is that it is possible with the right approach.

In this blog post, we'll outline some steps you can take to begin your journey towards more efficient and effective business processes. This is a practical approach from measuring and analyzing your current processes, to defining roles and responsibilities and identifying areas for improvement, we'll provide a guide to direct your review.

Whether you're a small business owner or a large corporation, these tips and strategies can be tailored to fit the unique needs of your organization.

So let's dive in with this article which are necessary steps toward gaining full benefits from supply chain process automation and orchestration.

Measuring Your Business Processes with KPIs

Measuring your business processes using KPIs can help you understand how well your processes are performing and identify areas for improvement. Some common KPIs for business processes include productivity, health, and compliance. Productivity measures how much output is being produced relative to the resources being used, while health measures the overall health and stability of the process. Compliance measures how closely the process is following established standards and procedures. By tracking these KPIs, you can identify issues with your processes and take steps to address them.

Think about proactive KPIs as well, basically, indicators that when turning "red", can be acted upon and will be fix with no visible external impact to other parties except your team!

Optimizing Process Frequency

The frequency of your business processes can have a big impact on efficiency and productivity. If processes are occurring too frequently, they may be taking up unnecessary resources and causing unnecessary workload. On the other hand, if processes are occurring too infrequently, they may not be able to keep up with the demands of the business. By reviewing the frequency of your processes, you can ensure they are occurring at the optimal rate to balance efficiency and workload. In some cases, it may be helpful to automate certain processes or adjust their frequency to better meet the needs of the business.

Sometimes it helps to segment your portfolio into segments. The high runners would be a distinct group with different frequency than the slow runners only sold to customers once in a while. You don't want to review stock level for slow runners every day. You might to it a a handful of SKUs representing the majority of the business. While obvious in retrospect, during the busy day to day it may not!

Capturing and Retrieving Information and Decisions

Effective communication and documentation are essential for the smooth operation of any business. By using tools and processes that facilitate the capture and retrieval of information and decisions, you can ensure that important information is not lost and that everyone is on the same page. This can help to reduce administrative burden and improve efficiency down the line.

Make sure this is not just a documentation writing exercise that no one ever look at after it is done!

Defining Roles and Responsibilities

A RACI matrix is a tool used to clearly define roles and responsibilities within a business process. It stands for Responsible, Accountable, Consulted, and Informed, and helps to clearly outline who is responsible for different tasks within a process. By using a RACI matrix, you can ensure that everyone knows their role and responsibilities, and that there is clear accountability for each task.

Consider using business roles rather than specific individuals in your RACI matrix to ensure that your standards remain relevant over time and across the organization!

Linking Incentives to Key Processes

Linking incentives, both monetary and non-monetary, to key business processes can be a powerful way to align the interests of your staff with those of the organization. By doing so, you can ensure that your employees are motivated to prioritize and prioritize their work in ways that support the overall goals of the business. This can be particularly important when it comes to complex, cross-functional processes that require the collaboration and coordination of multiple teams and departments.

Often, recognition and trust are the most valued. A 50Euros voucher will be quickly forgotten, the recognition of peers will not be that short-lived!

Remembering Past Improvement Ideas and Using Business Process Management Tools

It's important to remember past improvement ideas and not let them fall by the wayside. By keeping a log of all improvement ideas, whether they are implemented or not, you can ensure that they are not forgotten and can be revisited in the future. This can also help with root cause analysis and identifying patterns in areas that may need improvement.

Supply Chain workflow tools can be helpful in this regard, as they allow you to version your processes and implement changes at a future date!

Ensuring Necessary Input and Output

To ensure necessary input is available at the right time, it's important to consider the sources of the input and whether they are reliable and timely. For example, if a process relies on data from an external vendor, it's important to have a clear understanding of their delivery schedule and whether they have a track record of meeting it. If there are issues with the input, it may be necessary to consider alternative sources or to implement measures to improve the reliability of the existing ones.

Properly disseminating output is also key to the success of a process. This means making sure that the output is delivered to the appropriate parties in a timely manner and in a format that is easily understandable. It may also be necessary to establish protocols for how the output should be used and by whom. For example, if the output of a process is a report that is intended for upper management, it may be necessary to set up a review and approval process before the report is finalized and distributed.

A great piece of supply chain analytics not seen by anyone if the same as nothing being done!

Automate what does not require the human brain

This could include things like data entry, scheduling, or even certain decision-making processes that follow a set of predetermined rules. Automation can help to eliminate errors and reduce the time and resources required to complete these types of tasks, freeing up your staff to focus on more high-value activities that require human judgment and expertise. It's also important to ensure that any automation is implemented in a way that is transparent and easy to understand, so that staff can see the benefits and understand how it is improving the overall process.

Look around for RPA (Robotic Process Automation) as well as OCR for document processing to get started with this!

Ensure everyone is clear about the expected output

Without a clear understanding of what is expected, it is difficult for individuals to contribute their best efforts and for the process as a whole to run smoothly.

It may seem obvious, but clearly defining the expected output and being specific about the process can be especially beneficial for high-performing organizations. This allows individuals to adapt their work processes to meet the desired outcome, taking into account any constraints along the way!

Managing Complex Processes with Smart Triggers

Smart triggers are designed to automatically initiate actions or tasks based on specific conditions or events.

For example, in a supply chain, a smart trigger could be set to automatically send a notification to the relevant team members if inventory levels drop below a certain threshold. This allows the team to quickly address the issue and avoid out-of-stock situations, which can lead to production delays and lost revenue.

Imagine the top 10 worst forecast accuracy performers are spoon-fed to all stakeholders automatically every day to decide and act upon them in seconds!

Implementing Intelligent Workflows for Supply Chain

These workflows use smart triggers to manage complex processes, such as those in supply chains that involve decentralized, cross-functional teams across multiple organizations. With intelligent supply chain workflows, businesses can increase efficiency, reduce costs, and improve customer satisfaction.

One major benefit of intelligent supply chain workflows is their ability to quickly and accurately identify and address issues as they arise. With traditional supply chain workflows, problems may go unnoticed for a longer period of time, leading to delays and disruptions. Intelligent supply chain workflows, on the other hand, are able to quickly detect and alert relevant parties to potential issues, allowing for timely resolution.

Imagine only receiving 5 emails a day from next month knowing that all the coordination and management of your business processes are done for you so that you can focus on higher value tasks that cannot be automated!

Bonus: what is you simply stop doing the process?

One way to improve your business processes is to consider whether a certain process is necessary at all. Sometimes, a process may no longer be relevant or may have become unnecessary due to changes in the business. In these cases, it may be beneficial to simply stop doing the process altogether.

However, it's important to approach this decision carefully. Before stopping a process, consider the potential impact on the business and stakeholders. It may be necessary to consult with team members and other stakeholders to ensure that the decision to stop the process will not negatively affect the business!

To go further, read our article about Supply Chain Operating Models. The operating model is the aggregation of all the business processes within a business. Supply chain models prevent any functional silo thinking applied against the selected Supply Chain organization archetype. It also includes key information such as how to resolve conflicts, escalation methods and SLA within and outside supply chain functions.

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Julien Broucke
Co-founder & CEO, Process Metronome

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