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Checklist - Managing Supply Chain - Checklist

Better supply chain management ensures improved and cost-effective flow of resources, greater potenti... thumbnail 1 summary

Better supply chain management ensures improved and cost-effective flow of resources, greater potential for cooperation, and increased customer satisfaction. You can use this checklist to discover the key elements of supply chain management such as analysis of business, supplier management, and partnerships.

1. Understanding of the business environment
  • Identifying the market characteristics of each product/service with the following:
    • Customer needs
    • Pressures from suppliers
    • The level of competitor activity
  • Undertaking SWOT analysis to better understand the business environment and your current position on the market
2. Making analysis of the business
  • Analyze and summarize the existing competence of the business
  • Define which operations are the core to the business and which ones can be outsourced
  • Gather the essential information on customer needs
  • Set strategic priorities to determine key areas of the business where supply chain management succeeds
  • Analyse the current situation with the supply chain to identify suppliers, customers and relationships with them
3. Examining the existing supplier base
  • Compose a list of the suppliers for each product/service
  • Assess each of the suppliers against the performance criteria as follows:
    • Price
    • Reliability and responsiveness
    • Delivery
    • Quality level
    • Product specification
  • Sift out suppliers with the poorest performance
  • Try to have as less as possible supplier base. The reasons are :
    • Lower administrative costs
    • More time to manage each supplier
    • Better cooperation between the company and the supplier
4. Dividing suppliers into several categorizes
Divide supplier by groups such as "Under performing", "Preferred" and "Strategic"
Work at each of the groups to reach cost reductions in the supply chain:
  • "Under performing". These suppliers bring few improvement ideas to the supply chain
  • "Preferred" . Negotiate with these suppliers to discover the potential to reduce handling, distribution and warehousing costs
  • "Strategic". These suppliers are committed to found a long-term partnership
5. Establishing supply chain partnership
  • Build partnership considering the following conditions:
    • Shared risk and mutual trust
    • Mutual strategic interests and synergy
    • Sharing privileged or confidential information
    • Suppliers are involved in the designing of a new product
  • Start with a supplier the company already has good relationships with
  • When negotiating with a supplier, consider the following actions:
    • Find mutual cost benefits (win/win scenario)
    • Encourage ideas of benefit to both parties
    • Base relationships on mutual trust
    • Ensure the partner in long-term cooperation
6. Establishing the supply chain network with a process map
  • Widen the established partnership to involve new customers and suppliers
  • Design a process map for the entire supply chain
  • Identify total costs and movements with this map
  • Use the process map to reveal areas of potential wastage
7. Monitor the supply chain
  • Ensure that supply chain operates as planned and provides the benefits to all involved parties
  • Ensure that indicators and measures are monitored on a regular basis
  • React immediately to any shortcomings or delays through the indicators
Use performance measures to estimate the benefits from reduced costs, reduced delivery times, etc.

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