Your supply chain is a vital part of your business and how it runs. With so many moving pieces that go into supply chain management, it can be difficult to see if your system is efficient or if there are areas you can improve. This is why it’s important to take a step back and look at your company’s supply chain optimization.
What is Supply Chain Optimization?
Supply chain optimization refers to the process of looking at all of your business costs (storage, transportation, distribution, etc.) and determining what could be streamlined. As your business grows, you may find steps in your process that no longer serve you or strain your supply chain. Supply chain optimization would look at these steps and figure out if they should be cut or if they can be repurposed to be more efficient.
Some examples of this would be reducing the production of a less popular product to eliminate excess, choosing a cost-effective transportation system for shipping, or outsourcing business functions where you can.
While utilizing optimization strategies can help reduce costs, it is not about going with the cheapest you can find. In order to optimize your process, you want to still have a quality product, not a cheap one. Simply, supply chain optimization is delivering a high-quality product while reducing costs and waste and increasing the efficiency of your business practices and expenses.
Why is It Important?
Supply chain optimization forces look at everything that’s working for you and everything that isn’t. This includes your customers’ experiences. What do their delivery times look like? Are they receiving quality products? Are you meeting customer demand?
Determining the answers to these questions will help you improve your supply chain management. If you find an issue while asking these questions, then you can strategize on how to improve the customer’s experience. Adding value services, such as pick-and-pack logistics, can put you a step ahead of your competitors and increase your customer satisfaction.
Ultimately, in order to be a successful business, you need to be generating a profit. While your business may already have a healthy profit generation, supply chain optimization ensures that there aren’t unnecessary costs that are eating into your profit margin.
How does optimizing your supply chain do this? Imagine your business has recently expanded to long-distance shipping. Perhaps before, you only utilized truck shipping logistics. But through the process of trying to optimize your distribution plan, you learn trains are much more cost-effective for long-distance shipping.
By identifying your options and choosing the best choice for your supply chain, you’ve removed costs that can now be allocated to profits.
While this is just one example, there can be several factors in your business process that can be optimized like this. Choosing a trusted third-party logistics company like CWI Logistics to handle your logistics needs can ensure you’re increasing your profitability without sacrificing quality or speed.
One of the key benefits of supply chain optimization is you can operate with accurate numbers and statistics. By utilizing supply chain management services and all the analytic tools that come with them, you can know exactly what your customers are buying, which products are in high demand, what your delivery times are, and so much more.
Knowing all of these factors gives you a better insight into how your business doing and what you need to improve. Without optimization, you could end up putting out supply chain fires that could have been avoided with a supply chain optimization plan. Taking the time to understand your supply chain and optimizing it lets you focus on what really matters in your business.
Optimize Your Supply Chain with CWI Logistics
Studies have shown that businesses that outsource with 3LP businesses have seen their overall costs reduced. For this reason, working with a 3LP company to handle your logistics is a popular supply chain optimization strategy.
For over 50 years, CWI Logistics has been an industry leader in Florida for 3LP. We want to come alongside you and your business to best optimize your supply chain. We can streamline your warehousing, transportation, customer service, and more. If you’re ready to take your first step in optimizing your supply chain, contact us today to see how we can service your company.