Supply Chain Secret – Automation Is Only Part of Success

Let’s take a look at the recommended components of Supply Chain Management and then let’s bring it back to the basics.  No matter the size of your distribution or manufacturing company; the very most important concept is to be able to know what inventory you currently have on hand.  This is normally handled within an ERP (Enterprise Resource Planning).

When you start to grow it is imperative to keep your inventory system accurate by using wireless bar-code scanners and collecting data each and every time you touch your inventory. This includes counts, moves, transfers, picks, packs, ships, receipts, materials issues etc. With this real-time technology in place coupled with good operational procedures you have won half the battle.

When you start working with larger retailers you are going to need to add a little more automation in your communications by using EDI (Electronic Data Interchange). For anything related to purchases, orders, shipments, transfers etc.

So by using all of this technology do you think you will be successful? No, because the balancing act of automation, data, electronic communications etc. still does not cover the most important part of business.  That part is a little more complicated.  That part is the people part.

The most successful companies I have seen do have good systems and technologies in place. However, they also hire the right people.  Your purchasing agents most likely establish relationships with your suppliers.  Those relationships are critical to help manage the unexpected.   Let’s face it; people still help people they like.  Regardless if it’s putting a rush on a shipment, negotiating a better rate or simply providing quality services; those are human being driven decisions.  The same thing goes for Warehouse, Production or Shipping Managers.

The better you can communicate to your team members your objectives and expectations; the higher quality you will find your internal production.  So will you ever be able to eliminate the people part of the equation? No that is why it is imperative to not only evaluate the technology you have in place but also assess your personnel.  The very best buyers, planners, managers and information technology employees are capable of communicating well with other people.

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