Supply Chain Optimisation FAQ

At Supply Chain Advisory we have put together a short list of our most frequently asked questions for supply chain optimisation:

1. How do I know if my Supply Chain needs attention?

2. What can Supply Chain Advisory do for me?

3. How can I optimise my logistics operations?

4. Do I really need inventory?

5. Where should inventory be held?

6. How much inventory should I hold?

7. What kind of companies use SCA services?

8. Why should I outsource my transportation and logistics functions?

9. For the uninitiated, what is supply chain optimisation?

1. How do I know if my Supply Chain needs attention?

Most businesses make the big mistake of ignoring their supply chain until they have a problem, such as insufficient production or warehousing capacity due to improper warehouse scheduling, too much capital tied up in stock, etc. It is important for companies to be able to identify potential problems before they harm the business. A supply chain optimisation strategy will not only help with this but also help to establish the correct procedures and infrastructures, enabling long-term planning.

2. What can Supply Chain Advisory do for me?

Dealing with carriers can be an absolute hassle. They normally charge variable rates from lane to lane and customer to customer. Supply Chain Advisory can help you to compare and analyse freight costs from all types of carriers. It takes a lot of expertise and technological know-how to manage your freight movements in a cost efficient and effective manner. Our expert team’s assistance is just a fraction of what it would cost you to run your own logistics operation, ensuring you are always getting the best deal.

3. How can I optimise my logistics operations?

Our supply chain consulting services are one of a kind. A dedicated team of professionals will ensure your supply chain optimisation by:

• Gathering data and evaluating your company’s logistics operations.

• Collecting shipment records, warehouse and distribution records and systems data.

• Reviewing all available contacts with your service providers in freight management and warehouse scheduling.

• Processing the gathered data in our modelling system. This will establish a baseline of your logistics network strategy and provide a visual of the routes, materials and products taken through your supply chain.

• Mapping the processes your business uses to better understand how you manage your logistic operations.

We incorporate cost benchmarking for key logistics activities that we identify. We do this to establish areas where cost reduction and service improvement can be found. This helps us develop a workable long-term logistics network strategy designed to produce ongoing improvements for your business.

4. Do I really need inventory?

In an ideal world businesses would not need to hold inventory, but the reality is that they need to protect their supply to remain in business.

Materials don’t flow continuously through a business. Inbound supply rates are not synchronous with the outbound supply rates, due to the multiple stops and bottlenecks within the supply chain.

As it’s very unlikely that your suppliers and customers will synchronise their processes to fit with yours, you do really need inventory to protect your supply.

5. Where should inventory be held?

To decide which locations you should hold your inventory, you will first need to establish the key points in your supply chain that need to be protected, often called ‘decoupling points’. They usually have a place between the procurement of raw materials and the manufacturing process, and also between the manufacturing process and the supply of the final goods. At these points it is more likely that inbound and outbound rates do not match and therefore, you will need to hold inventory to protect your supply. Save costs when importing your goods with customs warehousing.

6. How much inventory should I hold?

The amount of inventory held is to the scale to other processes, or by predetermined guidelines. This frequently creates a surplus of stock and as a consequence, customer service fails and stock becomes obsolete.

There are many types of inventory: cycle stock and safety stock, goods in transit, work in progress, obsolete etc., but only the first two are held to protect supply.

Cycle stock is the level of inventory held to ensure that the average customer demand can be met during the replenishment lead time. In other words, to make sure that you hold enough stock to meet customers demand while waiting for a new shipment to arrive. This can only be implemented if a business has accurate historical or forecast data for each product.

Safety stock is more complicated. Safety stock is an addition to the cycle stock, but the safety stock level exists to cover possible customer requests, above average amounts. You will need to hold safety stock so as not to fail in supplying your customers.

7. What kind of companies use SCA services?

Our services can be used by any company large or small, national or international, in any type of industry. If you want to benefit from the shortest transit times and pay the lowest transportation costs, Supply Chain Advisory is your best choice for supply chain optimisation. Supply Chain Advisory also offers customs consultancy services.

8. Why should I outsource my transportation and logistics functions?

Businesses often lack the expertise to optimise their supply chains themselves and end up allocating time and money away from their core business.

That’s why most companies outsource part of their internal functions and focus more energy on their core strengths. For instance, some functions such as processing payroll and hiring employees are commonly outsourced.

By working on supply chain optimisation with a 3PL advisory, companies can provide better services compared to doing it in-house and even lower their costs.

It would be a mistake to think that only organisations of a certain size should invest in an outside organisation to take a look at their supply chain management. Every business without enough resources available, or lack of skill set, requires external expertise to review the supply chain management strategy and optimise it.

9. For the uninitiated, what is supply chain optimisation?

Supply chain optimisation is achieving the most efficient way of moving and storing goods from the very beginning of the supply chain process to the very end. The chain runs from the procurement of raw materials to the product distribution at the point of consumption.

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