5 Strategies to Improve Supply Chain Performance in 2023

Supply Chain Strategies
  • January 2, 2023

Turn the current supply chain challenges into a competitive advantage for your business! Here are five strategies that can be used to improve supply chain performance.

Strategy 1 – Use Logistics as a Strategic Differentiator 

Logistics is a key part of having a reliable and resilient supply chain. Logistics can be a huge differentiator in product availability, process reliability, and customer experience. Many companies do not have a strategy when selecting transportation providers. Most companies only look at price as the deciding factor.  Focus on the following to make logistics a differentiator in your supply chain:

  • Use non-West Coast US ports and Mexico ports to significantly reduce delivery times from Asia.
  • Optimize shipment planning, rating, dispatch, payment, and claims processes using a transportation management system.
  • Mitigate annual LTL increase through a structured review of LTL contracts.
  • Give customers options to let them determine if they want their inventory fast or at the lowest cost.  Many customers are willing to pay more money to get their products faster.
  • Use data to improve “free freight” program decisions.

Managing logistics operations in a way that aligns with business strategy will have a long-running financial impact. We work with clients to understand their business strategy and then tailor logistics programs to support their supply chain needs both domestically and internationally across all modes of transportation. 

Strategy 2: Improve Supply Chain Planning Capabilities and Optimize On-hand Inventory

Excess inventory in the wrong product ties up valuable working capital and creates risk.  Understocked inventory can result in missed sales. Longer lead times and disruptions don’t have to impact sales. But if predictive modeling of disruption is not part of the sales and operations planning process, then companies will always be trying to play catchup.                     

By improving inventory planning capabilities, companies can:

  • Reduce unneeded inventory
  • Eliminate stockouts and expediting costs
  • Reduce planning cycle times
  • Create what-if scenarios to model supply chain changes impact on inventory

Visigistics utilizes a leading predictive analytics tool to run thousands of inventory planning scenarios can identify inventory shortages before they happen.  

Strategy 3 – Improve Processes and Eliminate Bottlenecks

Every company can work on improving processes with limited investments.  Process improvements can focus on:

  • Process reliability and speed
  • Risk reduction
  • Reducing cost
  • Improving inventory velocity, cash flow, and asset utilization

Process improvements can have a significant impact on supply chain performance. Some improvements may take very little change to create benefit while others may take a complete redesign of the process to reach the desired outcome.

Visigistics is skilled in helping your team identify the processes that can be enhanced, streamlined, or automated so that you can better utilize resources to thrive.

Strategy 4  Reshoring and Nearshoring 

Companies manufacturing in Asia are getting hit with disruptions due to Zero Covid policies, long lead times, tariffs, and high ocean freight costs.  Manufacturing in the US is a great way to create resiliency and reduce disruption risk but can be cost-prohibitive in many cases.  US labor markets are tight.  But, it can be done with the right strategies.

Mexico has the benefit of having lower labor costs than China and access to the same natural resources that the US has.  Mexico is not as creative as its Asian counterparts in manufacturing and therefore makes it difficult to set up the necessary supply chains.  If interested in manufacturing in Mexico, we recommend using companies that understand manufacturing in Mexico and can lead the process of qualifying tier 1, tier 2, and tier 3 suppliers in Mexico.  

Visigistics has a strategic partner that helps companies move manufacturing from Asia to Mexico.  We also have the capability of supporting Logistics in Mexico, Mexico warehousing, IMMEX, and Cross-border logistics between Mexico and the USA.

Strategy 5 – Effectively Equip and Enable Your Team

Discover your team’s biggest frustrations. Invite them into the process of making improvements and defining the tools and training that address the most significant operational needs. Focus on transformational change that can impact the entire organization. Change can be uncomfortable. Allowing people to truly participate in these efforts can have far-reaching benefits financially and organizationally.

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