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Efficient supply chain performance is key to achieving the most profitable bottom line possible. For this reason, it is important to examine each aspect of that performance process, making sure all factors are operating with the greatest degree of efficiency. From time to time, this means making small changes in the supply chain network or the general operation in order to keep the chain in step with the current needs of the company.
There are several key aspects that make a considerable impact on supply chain performance. One of the most basic has to do with inventory. Specifically, raw materials inventories and supply inventories are key to keeping any supply chain moving. Failure to keep a sufficient amount of raw materials on hand means interruptions in the production process that can waste valuable time and increase the overhead of the business.
At the same time, an inadequate supply inventory means necessary machine parts, packaging, or other essential components of the process are not on hand when required, which further hampers the manufacturing effort and delays fulfillment of orders to customers. Making sure both inventories are replenished in a timely manner avoids costly delays and keeps supply chain performance at optimum levels.
The location of various operations used in the production process is extremely important in terms of improving supply chain performance. Arranging each phase of the process so that a minimum amount of time and effort is required to move goods through the process means that more finished goods are produced in less time. This has the effect of lowering the overall expense associated with producing each unit, making it possible to earn the highest amount of profit at the point of sale.
Along with inventory maintenance and location, supply chain performance is also affected by proper maintenance and replacement of machinery used in the production process. When machinery breaks down, the supply chain is interrupted, even if there are plenty of raw materials available. For this reason, regular maintenance of production machinery helps to decrease the potential for downtime, since small problems are identified and addressed before they become big problems.
Supply chain operations must be tailored to suit the needs of each business. The process that works in a small business may or may not be similar to the supply chain management that takes place in a larger operation. This means that truly efficient supply chain performance will always involve assessing needs, crating a workable supply chain network, and engaging in supply chain planning that ensures enough raw materials are on hand, machinery is maintained, and that goods can move through the production process as quickly as possible, while still maintaining a high degree of quality.
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