Underneath all the glamour of brand image and stylized appeal offered by stellar marketing tactics, the gears of operations and supply chain management (OSCM) strategies enable a business to keep going and maintain a sustainable performance within their respective industries. And while looking outward and planning to enter new market opportunities are welcome propositions to influence business growth, striking at the core of your OSCM can be just as effective, with the likelihood of retaining more long-term future economic benefit for the company.
However, despite being essential to business expansion and future scalability, only a select few up-and-coming startups ever really consider the prospect of allocating budget and resources to innovate in this field. Thus, to help more aspiring entrepreneurs make smarter and more efficient decisions for their businesses, we’ll be going over the many benefits of optimizing one’s OSCM and just how they should go about achieving this target goal.
How Does Optimization Promote Business Growth?
Now, we won’t deny that optimizing an OSCM strategy doesn’t sound as effective compared to other business opportunities that certainly carry a more relevant buzz like emerging tech sectors, the rising popularity of crypto and blockchain development, or partnering with top-performing tech companies. However, the benefits lie in already existing products with the capacity to provide value and retain loyal customers by speeding up processing and manufacturing times and introducing the potential to expand your distribution reach.
- Slash Processing Time and Increase Productivity: The past two years left the global economy in quite the predicament wherein steep bearish drawbacks were suddenly met with unsustainable bullish momentum with supply and demand never seeing eye to eye. As a result, efficiency is becoming increasingly important given the bouncing back of economic activity, meaning that only companies able to keep up are in a position to leverage this benefit. Therefore, an optimal OSCM strategy enables success in today’s global context by matching current demand.
- Potential to Expand Your Current Distribution Channels: Apart from a strictly numbers-only point of view, OSCM optimization also promotes business growth by introducing the potential to expand and add to your current distribution channels. Supply chains are often held back by manufacturing output or drawbacks in material acquisition, but if you can overcome this challenge, reaching new markets is easily accessible. Therefore, with a bit of automation and executive supervision, efficiently distributing more products and goods is not beyond your capabilities.
Organize and Optimize According to Function
If you want to get the most out of an OSCM strategy, it’s best to break down and categorize business processes according to function and purpose because this narrows down what specific areas require change and maximize the return on investment for resource allocation. Namely, you’ll want to identify your core operations according to planning, sourcing, making, delivering, and returning.
- Planning: Planning entails anticipating demand, forecasting future outcomes, and developing a set of metrics to follow to more accurately prepare a company’s manufacturing capacity according to the external environment. So implementing technical analysis and maybe even machine learning to help monitor your supply chain can improve the value provided to customers. Furthermore, outsourcing activities can also help reduce costs, alongside receiving feedback from a business growth strategy consultant.
- Sourcing: As the name suggests, sourcing includes the selection of suppliers that will deliver the raw materials and ingredients necessary for the creation of a product. But the same process also includes more technical details such as pricing, timing schedules, and payment processes, just to name a few. Therefore, to optimize this step of an OSCM strategy, you must cross-reference different suppliers and see which ones serve as better partners for the firm. Furthermore, robust tracking systems for acquisition orders can significantly reduce the risk of abnormal losses.
- Making: Making the product itself is the most crucial step in an OSCM strategy; however, much of the processes behind manufacturing are unique to each company and industry. Thus, one area that you can optimize and hopefully introduce more efficiency is improving employee coordination and other critical resources like equipment handling and support production. Metrics such as volume, downtime, overall utilization can also highlight speed, quality, and productivity.
- Delivering: While delivery is often associated with logistics processes, delivering the product still plays an essential role in the overall OSCM strategy because it moves the products to the end customer. And if you want to optimize the delivery processes, the integration of information networks that keep carriers and warehouses in communication with each other will assist in the monitoring of receipt orders. Plus, robust information networks also make it easier on invoicing systems.
- Returning: Last but not least, to round out the OSCM strategy consists of the process of returning worn-out, defective, and otherwise excess products back from the customers. On paper, it might appear as unnecessary extra grunt work that will incur more costs for the business. However, the return of said products and all follow-up activities can help highlight production or delivery issues and provide customers with due support. And one other way to turn a profit on returned items is by investing in refurbishing or directly selling them at reduced prices.
You Can Achieve Growth by Looking Inward
In conclusion, there’s much more to business growth than just what stands right in front of you because looking inward can easily provide the same benefits at a fraction of the cost. And since we are still in the middle of supply chain chaos, optimizing your OSCM strategy is among the best plans of action you could pursue today.