Supply chains have always been the backbone of any business. They ensure the smooth and efficient flow of your goods and services from the point of origin to your end consumer.
Now for a moment, I want you to envision what your business would look like without the supply chain you currently have now.
For some, this may be chaos. For others, you may be thrilled at the prospect of a supply chain that is more organized and more efficient. And for those that aren’t confident in their current supply chain specifically, rethinking your supply chain strategy–or components in your supply strategy–is so important for your bottom line.
However, in recent years, supply chains have faced numerous challenges, and as you know, the pandemic only further exacerbated these issues.
A big question that should always be a part of your supply chain strategy is understanding how you can prepare for additional changes and impacts from external factors that may come…
Recent impacts on supply chains
So, what has happened to significantly impact supply chains in recent years?
There are three major buckets that have made some big impacts in today’s supply chain management.
Decreased global trade: As you know, global trade experienced a significant decline of 5.3% in 2020 due to the pandemic. Lockdowns, travel restrictions, and reduced consumer demand disrupted supply chain networks worldwide, resulting in delays, shortages, and increased costs.
Increased ecommerce demand: With people staying home, online shopping skyrocketed. According to Statista, global e-commerce sales exceeded $5.7 trillion in 2022, up by 24.9% from the previous two years.. This surge in demand placed tremendous pressure on supply chains, requiring faster and more efficient delivery options.
Supply chain visibility challenges: Many supply chains lack transparency and real-time visibility, making it difficult to identify bottlenecks and respond to disruptions. A survey by Deloitte found that only 6% of organizations have complete visibility across their supply chains. This lack of visibility hampers the ability to make informed decisions and optimize operations.
So, why is a supply chain strategy so important to function smoothly?
Given the challenges faced by today’s supply chains, having a robust logistics strategy is crucial. A logistics strategy provides a roadmap for effectively managing the movement and storage of goods, reducing costs, and meeting customer expectations. And, it ensures a competitive advantage by improving efficiency, reducing lead times, and mitigating risks.
No one wants chaos in their supply chain…
5 key elements of a logistics strategy
Some of these elements will seem obvious, but they can be easily overlooked.
When developing a logistics strategy, consider including the following key elements:
- Supply Chain Network Optimization: Analyze, analyze, analyze. Start by analyzing your supply chain network and identify opportunities for consolidation, reconfigurations, or optimization. You’d be surprised at how much you are overpaying, how many duplicating efforts you have, and what you just don’t need anymore. This process can help reduce transportation costs, improve delivery times, and enhance overall efficiency.
Before you overthink it, yes, this will take time but it is worth it.
- Collaborative Relationships: Foster strong relationships with suppliers, manufacturers, and logistics partners. This may seem like a no-brainer but it can easily be overlooked.
Collaboration and sharing information can lead to greater efficiency, better inventory management, and improved responsiveness to disruptions. It also ensures that your processes and systems within your supply chain from manufacturing to transportation to first, middle and last mile are all lock-in-step.
- Real-time Visibility and Tracking: Invest in technologies that provide real-time visibility and tracking capabilities across your supply chain. This enables you to proactively identify bottlenecks and respond to disruptions quickly.
Being able to track your packages at all hours of the day 365 days a week provides more insight and awareness of the who, what, when and where of your products. There is less room for mistakes and more room for making data-driven decisions. These could look like: optimizing transportation routes, better inventory management, stronger personnel scheduling, and more.
- Effective Inventory Management: Optimize inventory with demand forecasting tools and accurate sales data. This minimizes inventory holding costs while ensuring product availability and reducing the risk of stockouts.
Data, data, data. You can’t make decisions without data and this is where utilizing real-time tracking and inventory management systems together are so important. Do your systems track your inventory effectively? Does your team know when and where to look? Do you feel confident in forecasting with what data you have?
- Reusable Packaging Solutions: Adopting reusable packaging solutions can provide environmental benefits while reducing costs. According to a study by the Sustainability Consortium, reusable packaging can reduce packaging waste by up to 95% and supply chain costs by up to 20%.
This is a common misconception that reusable packaging is going to add more work and more costs in your supply chain. However, we know that isn’t true. We’ve seen packaging cost savings up to 88% for a full year. That’s not insignificant…
Your competitive advantage
In today’s dynamic business environment, an effective logistics strategy is essential for maintaining a competitive advantage. We know that supply chains are wrought with vulnerabilities, but that doesn’t mean you can’t find the solution before they occur.
Using the key elements above to audit your supply chain is worth the effort to find ways you can be more efficient–in cost, operations and time. Let’s be more proactive rather than reactive.
Looking for better supply chain optimization and overall decreased costs? Learn more about LimeLoop’s Trackable Reusable Packaging
