Seven Principles of Supply Chain Management

The COVID-19 pandemic and significant weather events caused supply chain issues that are continuing to make waves. Empty grocery store shelves, incredibly long delivery times for building materials, empty car lots, and rising costs at the register have become the norm for now.

But even with supply chain issues as a common topic in the news, few outlets have produced any solution or actionable insight into what can be done to improve supply chain efficiency. One of the best ways to surmount these challenges is to employ the seven principles of supply chain management and to utilize technology to support each principle to create a more resilient supply chain.

The seven principles of supply chain management and how technology can help

To understand how technology can be used to reinforce the seven principles of supply chain management, it is important to first have an understanding of those principles.

Principle 1: Improve visibility into your inventory

Knowing your inventory, how much you have, and where you have it is critical to managing the supply chain. Removing blind spots and optimizing awareness of inventory is tricky but can be managed with the strategic application of ERP software like Microsoft Dynamics 365. The more familiar you are with your inventory, the better equipped you are to adjust to changes in the marketplace—all while supporting a healthy supply chain.

Principle 2: Manage supply and demand as a “flow”

It can be difficult to quickly react to surges in demand because manufacturing and shipping goods takes time. Equalizing the flow of inventory through the supply chain can help you ride out the rises and falls of the market. Consider smaller, more manageable, more frequent orders over large inventory drops to maintain this critical balance. Using Microsoft Power BI to automate the manufacturing process can also help you flatten the curve and avoid delivery delays or excess inventory.

Principle 3: Change to a faster, more flexible pipeline planning system

Efficiently and successfully managing your pipeline is another important piece to maintaining a resilient supply chain. Unfortunately, many manufacturers struggle with pipeline planning, as they relegate the planning processes to nights or weekends. This can result in a major delay in identifying inventory needs and ramping up manufacturing to address those needs. Dynamics 365 offers the power and ability to provide pipeline planning 24/7, eliminating costly delays.

Principle 4: Use real-time analytics to measure the volatility of demand

While historical purchasing data can be informative in predicting demand, expecting the past to give you insight into the future isn’t the best strategy. The substantial fluctuations in demand during various periods, across different geographicies, or within diverse demographics are difficult to predict based only on historical data. Real-time analytics are necessary to understand what’s happening now and to identify and react to signs of changing demand. Microsoft Business Intelligence Reporting enables you to create custom notifications based on predefined thresholds to help you react immediately to these signals.

Principle 5: Improve the effectiveness of your forecasting models

Businesses have always focused on predicting demand fluctuation. Unfortunately, no one could have predicted the level of demand fluctuation since the early days of the pandemic. A valuable lesson was learned, however: Businesses cannot depend on archaic forecasting practices. They must instead increase the amount of available data used in their forecast models, including real-time insight and information gained across the supply chain and marketplace. The Microsoft ecosystem presents the functionality and power ty necessary to collect this crucial data, manage it, and then synthesize that data into actionable forecasting models.

Principle 6: Diversify your supplier networks

Another difficult lesson from the pandemic is that businesses need to sustain diverse supplier networks to manage unexpected demand or delays. Unfortunately, managing multiple vendor relationships can be problematic, especially when those suppliers are spread across the world. Dynamics 365 and erm360 from HSO can help you develop, maintain, and monitor the diverse supplier relationships these trying times demand.

Principle 7: Add new distribution networks and channels

COVID-19 put the spotlight on the disadvantages in traditional distribution networks and channels. During the pandemic, consumers began looking for new ways to get what they needed, from goods to food to entertainment. Empowering innovative distribution networks and delivery methods are imperative to addressing the crisis, but even after the pandemic has subsided, these new channels will likely continue to be pursued by consumers, and technology will play a significant role in supporting them and helping predict new trends for distribution.

To learn more about the seven principles of supply chain management and the role technology plays in sustaining a resilient supply chain, read the Microsoft eBook, Seven Principles of Supply Chain Management, and be sure to visit HSO’s Supply Chain Resiliency hub for additional information.

Why choose Microsoft Dynamics 365?

Microsoft Dynamics 365 is the perfect avenue for manufacturers to strengthen and innovate in a rapidly changing economic climate. By providing organizations of all sizes with a secure, cloud-based platform, with the right tools to manage their supply chain, finances, and operations, in addition to support for customer relationships from a single application, you can achieve complete control and full visibility across all areas of your business.

Learn more about HSO for Manufacturing and how we’re helping manufacturing businesses like yours with award-winning Microsoft technologies:

Plus, a wide array of business applications designed to help you reach your desired goals.

Contact HSO today to learn more.

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