What factors are most important in creating a supply chain management strategy?

Supply chain professionals are in charge of some of the most important and complex aspects of business operations. There are many technologically advanced tools to help them in their work these days, but regardless of what solution they use, they must understand how to coordinate a complicated choreography of supply, transportation, and logistics.

Here are some of the most important factors in creating a supply chain management strategy.

• Planning and forecasting. Managers need to put a plan in place for analyzing trends to forecast demand. Plan how to respond to changes in demand and how to anticipate new demands that emerge over time.

• Raw materials sourcing. A key part of the supply chain is the raw materials that go into products. Managers look at various factors in deciding where to source materials, including cost, management, and concerns around social responsibility.

• Third-party logistics. Many businesses use third parties to outsource some aspects of distribution, warehousing, and fulfillment services. It’s important for managers to make sure that they’re working with trusted partners and that roles and responsibilities are clearly defined.

• Inventory management. Inventory management is an essential piece of supply chain management. Managers need to keep costs low and efficiency high by staying on top of stocks and frequently analyzing how fast each item is moving off the shelves.

• Shipping and delivery logistics. Customers often have questions about when their orders will arrive, and a company needs to be able to provide robust information to manage their expectations. Doing so requires having a firm handle on shipping and delivery logistics, even if using third-party shipping and fulfillment services.

To be truly strategic about designing supply chain management methods, it’s best to define one’s goals specifically at the start. What would be a success? Defining expectations helps managers judge whether the improvement is needed as the system starts running.