Characteristics of Effective Supply Chain

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Disclaimer: This is an essay submission for the Fishbowl Supply Chain Management Scholarship and does not reflect the opinions of Fishbowl

Top 3 Characteristics of an Effective Supply Chain - By Brookelee Makley

Supply chain excellence can be defined as the ability to improve on a portfolio of metrics. Three characteristics of an effective supply chain are consistency of leadership, technology implementations, effective supply chain planning and network design.

The first characteristic of an effective supply chain is the consistency of leadership. Consistency of leadership helps to build a strong foundation for an effective supply chain. If a company is switching leaders quite a bit then the foundation for an effective supply chain will be sloppy. By a company having a consistent leader the foundation for the supply chain is strong and well built. Supply chain leaders need to have critical skills in order to be effective leaders. A few of those characteristics are to be driven by metrics, technology savvy, and to have a performance reward orientation. In order for leaders to be driven by metrics they need to be able to list and explain the factors effecting availability and cost. They also need to encourage companies to do the best practice analysis. Leaders should establish a reward and incentive program in order to encourage their works to improve the companies progress. By providing incentive programs, people work harder in order to achieve their bonuses. Leaders need to understand the new technology in order to have an effective supply chain.

The second characteristic of an effective supply chain is technology implementations. Companies with technology implementations done correctly the first time help the foundation for an effective supply chain evolve over time. For example, a company such as General Mills creates and develops technology correctly the first time causing an their business to evolve more throughout time. The use of technology helps companies keep track of their inventory. Also the use of technology helps a business track their progress as far as finances and product availability. Technology plays an important role in any business by reducing the cost of products and meeting the customer demands. Technology helps the function of organizing, planning, and strategizing within the company.

The third characteristic of an effective supply chain is effective supply chain planning and network design. Network design is defined as a company being able to meet the long term objectives of the company. A supply chain network can be used to highlight interactions between companies. Companies actively design valuable networks in order to manage demand and supply variability. A companies network is not just used to create an effective supply chain it is also used to ensure customer satisfaction. Customer satisfaction is important because this keeps the business going and the customers buying more product. By understanding the function of inventory, companies enhance their foundation for the effective supply chain. Businesses are good at supply chain planning in order to balance the portfolio of metrics.

In conclusion, businesses need to have a clear definition of value in order to create an effective supply chain. Supply chain excellence can be defined as the ability to improve on a portfolio of metrics. Businesses look at a company from the outside in order to determine the effectiveness of the supply chain by looking at the customers, vendors, and stakeholders. Customers are looking at whether they got the right product at the right time in order to meet their needs. Stakeholders look at how much revenue was generated. Vendors will be looking at how well a company is able to solve problems. the three characteristics of an effective supply chain are consistency of leadership, technology implementations, effective supply chain planning and network design. An effective supply chain is an important factor for any business in order for the company to build itself up.

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