Seven Ways to Achieve Supply Chain Excellence

Updated December 9, 2024

Businesses looking to start 2025 in a strong position will focus on executing supply chain excellence. An efficient, robust supply chain is essential for companies charting a course through the ever-changing global commerce landscape.

Supply chain excellence directly impacts a company's ability to meet customer demands, reduce costs, manage risks, and innovate—all critical factors for long-term success and growth in today's competitive business landscape.

Let’s walk through the details of supply chain excellence, show how it impacts business success, and what your business can do to create it in the coming year.

What is supply chain excellence?

Supply chain excellence isn’t just a trendy idea that will be gone by next year; it’s a foundational principle on which successful businesses compete in today’s environment. Supply chain excellence is when companies deliver products or services consistently and efficiently, with flexibility, optimized data management, and real-time visibility. Excellence also requires integrating previously separate supply chain elements, such as production, logistics, procurement, and customer service.

Notable examples include:

• Amazon: With its efficient and robust logistics resources, the king of ecommerce has done nothing less than revolutionize supply chain management, with the fastest deliveries in the industry, unparalleled product variety, and real-time tracking.
• Toyota: It has one of the leanest supply chains in the industry with its just-in-time production approach. This strategy minimizes waste while also keeping product moving freely to customers.
• Schneider Electric: This electrical infrastructure firm places a high value on environmental stewardship and has provided resources, training, and overall guidance to its suppliers. This led to a 10% reduction in their suppliers’ carbon emissions in 2022.
• Colgate-Palmolive: This company is also a leader in environmental sustainability, building agility using end-to-end supply chain segmentation. They are also working with the National Aeronautics and Space Administration (NASA) to potentially provide health products to astronauts.
• Johnson & Johnson: This life-science firm stands out in its ability to create solutions for customers across an immense variety of medical tech, consumer products, and pharmaceuticals. They can also make data-driven real-time decisions.
• PepsiCo: The beverage behemoth is encouraging a more sustainable and secure food supply using regenerative agriculture. It also uses AI and real-time data to improve manufacturing efficiency by reducing production downtime.

Now that you know the details of supply chain excellence, how do you develop it?

Seven tips to achieve supply chain excellence in 2025

There are many ways to improve your supply chain. Here are seven key steps of where to start:

1. Start with a clear plan: Establish a comprehensive supply chain strategy and communicate that to all employees, vendors, and stakeholders. This ensures everyone is on the same page.

2. Treat your team well: Workers are more productive when they have a stake in the process. Cultivate a workplace culture of innovation, collaboration, and improvement.

3. Embrace automation: AI, robotics, and IoT are the future of a wide range of industries, particularly supply chain management. They save time and money by minimizing or reassigning repetitive tasks, and improving efficiency and accuracy.

4. Expect the unexpected: Be ready for whatever challenges await your company by putting the supply chain through thorough stress tests. Consider developing contingency plans so business continues to progress in the event of an unforeseen crisis.

5. Upgrade your warehouse technology: Lower costs by embracing software that streamlines inventory management, cultivate real-time data crunching, and improve order accuracy.

6. Measure your performance: It’s crucial to regularly benchmark your supply chain’s performance to measure it against industry standards.

7. Smooth out processes: Find any redundancies or bottlenecks and promptly remove them.

If a company lacks a strong supply chain core competency, it will struggle to meet customer demands, quickly react to market shifts, and keep costs down. This can lead to excess inventory, inefficient systems, and bad press, bringing revenue down, along with customer confidence.

However, supply chain excellence leads to numerous benefits.

Cost Efficiency: Improved supply chain management reduces operational costs through optimized inventory levels, streamlined processes, and better resource utilization.

Enhanced Customer Service: Efficient supply chains ensure timely delivery, reducing lead times and enhancing customer satisfaction. Meeting demand effectively leads to higher customer retention and loyalty.

Increased Agility: Agile supply chains can adapt quickly to market changes, allowing businesses to respond promptly to disruptions, changes in consumer preferences, or shifts in demand.

Better Risk Management: A robust supply chain strategy mitigates risks by diversifying suppliers, having contingency plans, and building resilience against disruptions like natural disasters, geopolitical issues, or pandemics.

Improved Quality Control: By managing the supply chain effectively, businesses can ensure consistency and quality standards across the entire process, leading to better-quality products and services.

Innovation and Collaboration: Collaboration with suppliers and partners often fosters innovation, enabling the introduction of new products, technologies, or processes that can give a competitive edge.

Optimized Inventory Management: Through better visibility and forecasting, companies can reduce excess inventory, prevent stockouts, and optimize inventory turnover, thus freeing up capital.

Sustainability and Ethics: A well-managed supply chain can incorporate sustainable and ethical practices, meeting environmental and social responsibility goals, which is increasingly important to consumers.

Competitive Advantage: Companies with superior supply chain management gain a competitive edge by being more efficient, responsive, and adaptable compared to their competitors.

Financial Performance: Ultimately, an optimized supply chain contributes to better financial performance, improving margins and profitability.

These benefits collectively contribute to a company's growth, resilience, and ability to thrive in a competitive market landscape.

A 3PL supply chain management solution

A partnership with a third-party logistics (3PL) provider can be vital in helping a company optimize its supply chain operation. A 3PL has the technology, expertise, and contacts to effectively navigate complex global logistics and enhance the company’s visibility in the process. Owners can stay focused on their core competencies while leaving the supply chain to the experts.

For an example of this kind of partnership, look no further than Ryder and BJC Healthcare. With healthcare supply chains under more scrutiny than ever, BJC needed assistance in delivering essential patient-care supplies and inventory management. Ryder created a customized, end-to-end supply chain and transportation solution in a centralized location of over 416,000 sq. ft., 1.3 miles of conveyors, 44 dock doors, and 17,000 SKUs. The process included logistics engineers, employees, and warehouse workers.

A 3PL as your supply chain management partner will put you in a stronger position to thrive in an increasingly competitive landscape.

To stay competitive in the future, companies should find a partner that can help optimize data management and provide flexibility, efficiency, and visibility. This will allow them to quickly move products to market, boost growth, and have a renewed focus on developing new products and services.