Mr. Smith shared five areas to focus on to improve supply chain performance in a piece for the Boston Business Journal.
1. Integrated sales and operations planning process. Use an integrated sales and operations planning process to ensure everyone is focused on the same goal. The process gains consensus and commitment to a unified plan that drives the entire organization and allows for an efficient supply chain, according to Mr. Smith.
2. Electronic data interchange. By communicating with customers and vendors via data, supply chain leaders can receive and invoice processes while eliminating manual entry and keypunch errors, said Mr. Smith. These electronic communications can be handled through electronic data interchange documents, which offer a standard electronic format for most common business documents like purchase orders and invoices.
3. Vendor managed inventories. Through vender managed inventory programs, the supplier is responsible for ensuring a customer’s stock levels are maintained at agreed-upon levels, according to Mr. Smith. Some VMI programs also offer consignment services, where the customer is not billed until the inventory is consumed. With this system, supply chain leaders do not need to manage stock levels on a daily basis. The system could also free up working capitol, according to Mr. Smith.
4. Rate shopping on small parcel shipping. Some software vendors offer technology that integrates with enterprise resource planning systems to analyze shipment data, assess the rates of several carriers and quickly discover the most cost effective option.
5. Pay on receipt. Mr. Smith believes supply chains should eliminate the invoice to create a more streamlined payable process. Pay on receipt programs automatically create the accounts payable voucher based on the purchase order price and quantity received. Payments reference the purchase order number, rather than a vendor’s invoice number.
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