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5 Easy ways to Minimize Supply Chain Waste

Our minds may automatically picture excess packaging or leftover materials on the factory floor, but supply chain wastage goes much deeper than that. It can also refer to employees’ time – due to a poorly-designed warehouse layout, for example – or wasted stock due to inadequate inventory planning. And those are just a couple of examples.

In short, by optimizing all processes within their supply chains – from the point of manufacture to delivery and even returns – companies can reduce wastage and transform their bottom line. This may require the adoption of smart and innovative technologies that streamline processes the whole way along – whilst being highly responsive to customer demand. 

1. Inventory Control

Being completely in control of your inventory is a guaranteed way to cut waste from your supply chain. Overproduction of products means you’ll have to pay for warehouse space to store the excess. Worse still, if the products in question are perishable (such as food goods), you could end up having to throw some away if they expire.  

Fortunately, there are plenty of inventory-management technologies out there designed specifically for e-commerce businesses. SkuVault6, for example, is a user-friendly, web-based inventory and warehouse management system for e-commerce retailers, that integrates with the leading online marketplaces including Amazon, eBay, and Shopify.

Clear planning for expected peak periods (such as Christmas or Black Friday) is also key for inventory management. And, if you do still find yourself with stock left over, turn it into an advantage – a flash sale or special discount code for loyal customers will help you shift the excess.

2. Review the manufacturing process with relevant stakeholders

In the same way that you can learn much from your customers, your employees (or your suppliers’ employees) are your best resource for identifying waste reduction opportunities across your supply chain. Even the best managers in the world can’t see everything, and people who are performing key roles are in the best position to provide valuable insight.

This doesn’t have to be a formal review, either. You can gain fantastic insight simply by producing a survey or asking simple questions. In fact, it’s often better to make it feel relaxed - people will tell you far more if they have an open forum and feel confident they can say whatever they want!

Consider asking about:

  • Processes that take too much time.
  • Whether specific processes add value to a product or the customer experience.
  • Waste management processes.
  • What opportunities do they believe exist for reducing waste and recycling more.
  • What ideas do they have for solutions to the problems they have identified.

3. Review your logistics operations

Logistics operations are often the source of many “hidden” inefficiencies within your supply chain. However, focusing on these can give you a quick win and instantly eliminate a significant source of waste.

You may only need to look at a handful of things here, including:

  • Products damaged or broken in transit, and what happens to these.
  • How much of your shipping capacity you use per journey.
  • The effectiveness of your inventory pooling.
  • Time wasted in double-handling products, and whether this impacts on breakage rates.

As you start looking at these, you will likely find other opportunities to drill down and further optimise the logistics side of your supply chain.

4. Review your communication channels

Optimizing your business communication is one of the quickest ways to eliminate inefficiencies within your supply chain network. While it sounds simple, knowing how data and instructions flow from your procurement team through to your suppliers and logistics teams can give you a significant opportunity to identify improvements.

The best thing to do here is to draw up a process map or flow chart detailing your communications and how they work.

Typically, the areas where you will find potential improvements will include:

  • Having unnecessary loops in the flow of information.
  • Multiple people receiving and reviewing data, even if the responsibility for sign-off sits with one person.
  • Bottlenecks where large amounts of data require review, and you’re not using automation.
  • Communication gaps and dead ends - often when it’s unclear what an action is or who is responsible for it.

5. Review your returns policies and processes

Dealing with returns is, by nature, an inefficient process, but due to the continuing growth of eCommerce, it’s something we all have to factor into how we work. What’s vital is that we minimise how returns impact our processes and maximise the efficiency of how we deal with them.

As a minimum, you should look for your returns process to:

  • Return products fit for resale into your inventory as soon as possible and for your inventory systems to be notified so you don’t overorder unnecessarily, creating another opportunity for waste to occur.
  • Enable defective products to be returned to your suppliers while tracking longer-term defect rates and ensuring suppliers receive this feedback. Remember to encourage your suppliers to use reverse supply chain thinking so defective products don’t just go to the landfill!
  • Have a process for quality checking returned goods. The worst thing that can happen from both an efficiency and a customer satisfaction perspective is that you return defective goods to inventory, which you then sell and ship to customers, thus necessitating the returns process to start once more.

‍Where’s the waste in your supply chain? How much are they costing you? Lets us know in the comments section.

Continue reading Benefits of Conducting a Supply Chain Audit for Your Business

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