Without a strong supply chain, your company can neither procure the raw materials nor distribute finished products. Plenty of factors go towards building the strength and stability of a supply chain, but you shouldn’t just leave something as important as supply chain design up to chance. You need to take charge of your supply chain’s design, so you can avoid disruptions and keep your company ticking along smoothly.
Supply chain design provides a model of your supply chain network, so you know how long it will take and how much it will cost to bring goods to market. Taking a conscious approach to designing your supply chain network will help you avoid risk, minimize inefficiencies, and perhaps even provide better service while cutting costs. Here’s how to optimize your supply chain network design.
Keep It Local
If there’s one thing the past few years have taught us, it’s that the longer your supply chain, the more vulnerable it is to disruption. That’s not to say that you shouldn’t look further afield if you need something that’s hard to find, or simply a higher quality material. But you should try to turn to local manufacturers as much as possible.
If parts and materials are produced locally, you can get them cheaper and faster, and you may be less vulnerable to shortages and other risks that come with distance. Sure, an overseas company might be offering you the same material for a lower price, but once you factor in shipping costs, increased risk, and lead times, it can actually end up being cheaper to get materials locally, in all the ways that matter.
Minimize Your Sources
The fewer links you have in your supply chain, the less vulnerable it is to risk, because there are simply fewer parties involved; a small supply chain is a smaller target than a large, intricate one. The fewer points of contact you have, the fewer logistical issues you’ll have cropping up, and the less stress you’ll place on your supply chain. If you can find manufacturers that offer a variety of services, it should be easy to pair down the number of nodes on your supply chain to a bare minimum.
It may even be worth changing your product or packaging design to accommodate the limitations of the supply chain. There’s a reason aluminum soda cans are a cylindrical shape – because the cylinder is structurally sound and allows manufacturers to fill up 90 percent of the space in the box or crate. Designing products and packaging so that it will ship well and be easy to ship is an important part of supply chain design.
Standardize Your Parts
You should always use standardized parts in manufacturing whenever possible if you really want to minimize supply chain disruptions. Standardized parts are easy to find, so if your supplier suddenly can’t provide the parts you need, you can probably get them somewhere else. And because standardized parts for manufacturing are produced on a wide scale, they’re usually a lot cheaper than custom parts.
Get Parts Pre-Assembled
Another way to save time and take stress off of your supply chain is to get parts pre-assembled if you can. We’re not saying you should drag an additional manufacturer into the mix – that would create more complexity in the supply chain design and create more opportunities for risk – but if your supplier offers pre-assembly services for some of the parts, it might be worth taking advantage of them.
If you can get your product partially assembled before it arrives at your facility, that’ll be less work that needs to be done on it when it does arrive. If something arrives late, you’ll have saved time on assembly already – time that you might very well need to keep your supply chain functioning smoothly. Pre-assembly is the “setting your clock ten minutes fast” of supply chain design – it’s a great time-saving hack that can make a huge difference when you need it most.
Build in Long Lead Times
Long lead times protect your supply chain network from delays – if something is late but you still have plenty of time, it’s not that big of a deal, versus if something is late and you’ve already reached the last minute. Building in long lead times can also help you cut costs because it reduces the need to rely on expedited freight shipping to get your materials on time to meet your production deadlines.
A strong, well-designed supply chain is essential if you want to mitigate the risk of disruptions. Keep your supply chain as short as you can, and source materials locally to keep shipping costs down and minimize risk. With appropriate supply chain design, your company could continue to operate smoothly, even when competitors are struggling.
