To ensure the smooth performance of your organisation, it is essential that you incorporate supply chain finance programme. You can install software, hire a supply chain management consultant or do it yourself if you have adequate knowledge. If you are a businessman and have attended conferences or even if your read business newspaper and articles you will find out how supply chain finance can give you the clear benefit.
But before designing a benefited supply chain finance system, it is necessary to know or think on does the supply chain system you built match all your requisite criteria and will help you to fulfil all the business goals you have set up? You also should focus on does your supply chain system has coverage to all other departments in your company? meaning to say that other departments in your company should also be aware of what is supply chain finance is? departments in my company even know what supply chain finance is? What should be the format for this platform? and many other things.
Given below are some steps that you can follow to design a supply chain finance programme effectively. These steps are described in detail. Following these will help you to design an effective supply chain finance system sure.
If you are wanting to design an effective supply chain program for you company
Step 1 – Experiment with different ideas
Avoid following the management programmes of your competitor. If you have understood the supply chain meaning accurately, you would know it involves numerous methodologies and processes, which will differ for different companies. It may not work for your business, thus strategize your own scheme. Experiment with different ideas to analyse what suits your company best.
Step 2 – Compare your suppliers
To have proper supply chain management, judge your suppliers and choose the programme that suits your supplier base to ensure the smooth performance of your business. To have a supplier-based supply chain management system you should review your supplier base to identify how to design system so that it can work for different types of supplier or for particular one you are looking for in the best way. So, you need to divide your suppliers based on the quality and type of product and plan your supply chain management accordingly.
Suppliers can be categorised into 4 of the listed groups. All these four are:
- leverage suppliers
- routine or non-critical suppliers
- strategic suppliers
- bottleneck suppliers
From the above listed group of supplier’s strategic suppliers always have a high profit impact.
Step 3 – Plan for crisis management
Strategies a programme that will help you at the time of crisis, which may be macroeconomic or microeconomic. Plan what to do if your business is in debt and segregate your finances to help tackle such situations. If you have any credit unpaid, analyse the process through which you can pay off your outstanding amount to reduce the burden.
Step 4 – Have a proper inventory management
Consider using your older supplies before you purchase new stocks. Segregate your inventory by ABC process. In such an analysis, ‘A’ stands for high-value products, ‘B’ stands for moderate-valued product and ‘C’ stands for low-valued products. Setting minimal requirements is one of the ideal inventory management techniques to save money.
Step 5 – Coordinate with your employees
Work in coordination with your employees for the smooth running of your business. Keep your workforce in confidence at the time of crisis management. Every executive should be in proper touch with subordinates and peers to be updated with on-going projects.
Step 6 – Stay in touch with your investors
Update your investors and shareholders with the performance of your projects. Organise an annual general meeting to provide them with your company’s performance, on-going projects and future project and financial reports. A well-maintained financial report will also help you in availing the best deal on a business loan for supplier.
Step 7 – Manage your finances
Analyse your working capital while you plan for any investment to decode the supply chain meaning. Avoid investing more than what is required. Also, utilising all your working capital in purchasing excessive raw materials is one of the mistakes to avoid when managing working capital for your business.
In addition to the above, hold frequent meetings involving all your employees and have interactive sessions to understand the requirements of your workers. A steady supply chain management will not only ensure customer satisfaction but will also confirm on employee satisfaction.