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How to Improve Supply Chain Management

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Improve Supply Chain Management - Logistic Transportation
Steve Thompson
Steve Thompson
November 25, 2022

Supply chains once seemed invisible to the general population, but in recent years have become top of mind to consumers. As big shippers tie up ports and trucking firms and deal with driver shortages, the domino effect of higher storage costs and slower deliveries threatens to disrupt consumer satisfaction. Here's a closer look at how to improve supply chain management to prepare for economic uncertainties.

Automate and Monitor Your Processes

Automatic Machines in warehouse

Moving toward modernization is crucial for large and small logistics operations to stay competitive. A vast or disorganized warehouse without a software management platform will most likely outperform competitors with digital infrastructures. Automation is an effective solution to various supply chain challenges, such as labor costs and shortages, as well as improvements in accuracy and speed of product delivery. While software and robotics have limitations, they make productivity more consistent and reliable.

The best way to collect and monitor data is with IoT sensors embedded with RFID technology connected to an electronic network. Keeping the devices close to where the data is processed, known as edge computing, maximizes data transmission efficiency and minimizes latency. Such a system allows warehouse and transportation managers to access real-time data to strengthen decision-making. Global supply chain managers can now make more informed decisions on the spot using advanced analytics, unlike when it took hours or weeks to research an inventory or delivery problem.

It's wise to work with IT specialists who stay updated on new technology without reacting to every new trend since expensive trends come and go. The answer to many warehouse and transportation problems is digital monitoring, which allows managers to cut losses quickly—for example, using too much electricity to power a warehouse can be detected with real-time analytics from IoT sensors. Room temperature and humidity dramatically impact inventory quality but can be easily, remotely, and automatically controlled with digital monitoring systems.

Cut Supply Chains Costs and Waste

Counting Money

The concept of sustainability grows more important for businesses every year as natural resources deplete and become more strained through supply chain bottlenecks. Warehouses and distributors that work in cross-functional systems to deliver raw materials or finished products must work closely together to reduce operational costs. Pallets for stacking warehouse inventory can play a subtle, helpful role in this equation.

Increasing the bottom line can be achieved by improving supply chain efficiency. Not only do suppliers, distributors, and retailers benefit from cutting unnecessary spending, but so do consumers. Reducing waste in the production and distribution processes is key to cutting overall costs and maximizing profits. Investing in the right technology, a warehouse achieves more accurate inventory counts, as inaccuracies lead to a snowball effect of supply chain weaknesses.

Another form of waste is excess inventory which takes up precious space because it doesn't sell. Effective inventory management requires an accurate estimation of consumer demand, or the warehouse can suffer financial setbacks. A reliable solution to avoid inventory imbalances is to invest in machine learning software that can forecast trends based on historical sales data and other factors that affect consumer demand.

Going more green is generally helpful for a producer or distributor to cutting waste. Adopting recycling as a measure to reduce costs and cut waste is rewarding in multiple ways, as it helps the environment, public image, and the bottom line. Investing in solar panels is a reliable method for cutting energy costs while reducing greenhouse gases. The cost of pollution is often overlooked by large operations, but once a company goes more green, it can realize a greater profit margin.

Maximize Warehouse Layout

Whether you run a small or large warehouse, a well-envisioned layout that facilitates efficient picking, packing, loading, and unloading is crucial. Since every warehouse has operational concerns and nuances, it's important to customize your layout. An awkward or random layout can slow down productivity and pose safety risks. Effective layouts allow for quick and safe exchanges of goods without hassles that slow down the distribution process.

One of the best ways to maximize warehouse space is to use wooden or plastic pallets. Stacking layers of finished goods in confined areas that can be easily moved allows for precise inventory placement and flexibility. Pallets facilitate a well-organized warehouse management system, contributing to supply chain visibility in the sense inventory items can be found quickly with a scanning gun that detects RFID chips of specific products.

Build a Responsive Supply Chain

The difference between responsive supply chains versus a group of suppliers that don't integrate well is like day and night. Responsive supply chain managers help their operations gain competitive advantages through real-time communication devices, quickly resolving inventory surpluses and shortages. The faster a distribution center can resolve inventory imbalances, the better it can meet the expectations of retailers and customers.

Questions surrounding improving supply chain management are answered convincingly with a policy requiring prioritized backup suppliers. Relying on just one supplier for a certain commodity has proven high risk in recent years due to the supply chain crisis. Warehouse managers must build a list that favors responsive suppliers while unreliable partners drop-down or off the list.

The most responsive supply chains are connected through a governing body that oversees and shapes interactions among different players. A council with representatives from each firm can analyze the distribution process and remove barriers to productivity. They can share charts and graphs of supplier performance to pinpoint necessary improvements. Ultimately, a supply chain council can improve cross-functional communication among suppliers.

two people talking

It's important to establish and nurture healthy supplier relationships. Without developed and appreciated relations, miscommunication and lack of coordination may occur frequently. Poor communication among suppliers can disrupt the journey of a product from the brand to the end user. Additionally, the best suppliers make negotiations easy, whereas those that complicate financial problems should be considered replaceable. Gaining a better understanding of how to improve supply chain management can help you build a more responsive supply chain.

Aim for an Interconnected Infrastructure

A long-term goal of suppliers, distributors, and retailers is to stay on top of customer demand. Digital infrastructure can put all business segments on one platform so that different departments and vendors can interact seamlessly. Digital inventory management must be part of every modern business model, emphasizing collecting valuable data in real-time.

When a warehouse operation uses a platform that facilitates interconnection between inventory, transportation, and customer data, the result is overall better supply chain performance. IoT tracking throughout this system gives managers and customer service representatives access to information on the delivery status of shipments from a manufacturer to a consumer. Even more powerful than an interconnected infrastructure through electronic networking is a network that interconnects with the entire supply chain.

Some warehouses rely on a small staff of employees who each must wear multiple hats. That's another example of how the integrated infrastructure streamlines a complex business operation. An interconnected digital environment allows for low-cost, user-friendly training programs that include videos, which speed up learning curves. It also allows for videoconferencing and multimedia, such as easy access to product images or virtual worlds for identifying inventory items.

An interconnected infrastructure further serves as an ecosystem for easy collaboration. Team players with access to the same databases and communication networks can work onsite and remotely more efficiently. Seamless supply chain interaction yields greater supply chain effectiveness.

3PL Outsourcing


Some manufacturers prefer to focus on production while outsourcing to third-party logistics (3PL) firms that commit to meeting customer demand. It's an efficient supply chain strategy for companies that don't want to devote resources to vehicles for transport. Instead of investing in large trucks, the company saves money on distribution by finding a 3PL that matches its logistical needs. The most advanced 3PLs use automation, robotics, and machine learning technologies in their delivery systems.

A 3PL typically has its own IT department to monitor data collection and cybersecurity. Various technical issues involving data transmission and analysis can be simplified by a 3PL that has invested heavily in digital transformation. The more experienced a 3PL is in terms of its personnel expertise and technology, the more confident a manufacturer can be in distribution since 3PLs specialize in making logistics as efficient as possible.

Another advantage to a seasoned 3PL is that it has already developed backup logistics strategies for when disasters strike. A 3PL is typically more prepared to deal with bad weather or road conditions and rerouting. Furthermore, 3PLs tend to adopt multiple sustainability policies, which gives your organization a direct connection to green initiatives and credibility.


Sustainability is very much a financial issue as it is an environmental safety issue. Once you understand how to improve supply chain management, you can begin adopting efficiencies that will help your organization gain a competitive advantage and a more sustainable future. Purchasing durable pallets is important to running an efficient supply chain, and you can order the best pallets in Fontana CA, from Pallet Market.