Monday, October 2, 2023

Top 6 Strategies to Reduce Supply Chain Waste

By Nikhil Sonawane - March 08, 2023 6 Mins Read

Top 6 Strategies to Reduce Supply Chain Waste

Efficient supply chain management should be one of the top priorities for businesses to reduce costs and supply chain waste.

The last few years have revolutionized businesses of all sizes, types, and industries because of various factors such as disrupted supply chains, global pandemic, inflation, etc. As a result, business leaders globally are looking for ways to save finances and accomplish sustainability goals.

Businesses must design and implement a circular distribution chain to reduce supply chain waste in the production process. Enterprises need to enforce the best strategies to have a lesser carbon footprint and better Environmental, Social, and Governance (ESG) adherence.

Businesses with lean manufacturing and distribution chain models will positively impact the brand image and customer experience.

The waste in the supply chain!

Most business leaders consider supply chain waste as leftovers from unused packing and other factory materials; However, the supply chain waste is way deeper than that. Finished goods might as well end up in a dump if there is no perfect balance between demand and supply.

The significant reasons for increasing supply chain waste are ineffective warehouse, procurement, production, inventory planning, traditional manufacturing tools, and poor marketing strategy.

Business leaders that want sustainable supply chain management must design circular distribution chains that consider all aspects, from manufacturing to delivery and returns. Such supply chain models will reduce the carbon footprint and revolutionize their bottom line with reduced costs. It will be a tedious process for businesses and require a huge investment in smart and innovative technologies to enhance the entire process.

Also Read: Top Supply Chain Trends Stirring Up in 2023

Following are the top 6 strategies that supply chain leaders can consider in reducing their waste in their distribution chain:

Consider the End First

While designing and implementing a plan to reduce the waste in the supply chain, business leaders need to start with the end aspect first. In order to have a lesser carbon footprint, businesses need to minimize waste that impacts the environment.

Considering the end part of the supply chain first help decision-makers determine the waste volume sent to the landfills. Determining what type and volume of waste is created in which part of the supply chain is crucial

Business decision-makers need to consider all the supply chain data points gathered, evaluate them and implement a strategic data-driven action plan to reduce waste.

A holistic view of how and where the supply chain waste is generated will enable businesses to have a strategic action plan to reduce it.

Efficient Resource Management

Most businesses fail to understand which phase of the supply chain generates more waste. Thoroughly evaluating the entire supply chain will help businesses to spot all the areas that generate more waste. Distribution chain decision-makers need to restructure their product logistics, manufacturing processes, and procurement plans to minimize waste.

Traditional manufacturing equipment that does not help to accomplish sustainability goals needs to be revamped with advanced tools with sustainable alternatives.

While managing the resources of the entire supply chain, businesses need to consider every small aspect of every process, right from procurement of the raw materials to delivering the finished goods to their customers. Processes that generate contribute to more waste must be revamped with better sustainable alternatives that have reduced cost, less carbon footprint, and efficient supply and demand processes.

Many business decision-makers might find it challenging to optimize their resources to have lean supply chain management. Such businesses can consult an industry veteran with expertise in the field to have strategic processes implemented.

Explore, Evaluate, and Implement the Right Waste Equipment Tools and Strategies

Implementing the right tools for businesses’ waste management needs is crucial. Once business leaders have all the processes that create waste, they can explore, evaluate and implement the best tools, techniques, and processes to reduce waste.

Based on the needs of supply chain waste management, enterprises can customize the tools and implement them to optimize operations. Exploring, evaluating, and implementing the most relevant waste equipment in the supply chain tech stack will help to save money, and resources, reduce carbon emissions and improve efficiency.

Get all the Suppliers on Onboard

Reducing supply chain waste is not the responsibility of one vendor, supplier, department, or vertical. It needs to be a top priority for everybody involved in the distribution and manufacturing chain to have effective processes to reduce overall waste.

Supply chain sustainability goals need to encompass everyone beyond the internal operations teams. Businesses, while partnering with vendors, must look for partners with sustainability as a top priority. Enterprises with third-party suppliers need to design a strategy and get everybody on board to have the same sustainability goals.

Optimize the Inventory and Warehouse Management

Enterprises need to implement advanced Inventory technology tools, such as vendor-managed inventory, to streamline their collaboration with suppliers. Business leaders need to have effective strategies that improve the conversion rates while having fewer investments in the inventory will enable them to accomplish their sustainability goals.

For instance, it is crucial technology is implemented on the supply chain tech stack that offers better vendor visibility to streamline the replenishment processes. Technologies that help to have better transparency in the supply chain will enable businesses to better understand the current production requirement and future raw material availability to avoid overstocking the resources.

Also Read: How Converging Technologies can Revolutionize Businesses

Enforce Upstream and Downstream Reporting Throughout the Supply Chain.

Businesses that aim to drive more value from their manufacturing and distribution chains need to establish upstream and downstream reporting to make strategic and more informed decisions. Upstream and downstream reporting will enable the decision-makers to determine potential risks and explore opportunities to embrace sustainability without compromising customer needs.

Supply chain leaders need to design and implement key performance indicators to monitor every aspect and identify the type and volume of waste created. Enterprises that aim to reduce carbon emission need to have real-time reports to make necessary changes to avoid waste

In order to accomplish the supply chain sustainability goals, it is crucial to have better collaboration between buyers, suppliers, manufacturers, distributors, and others involved. All the parties on the supply chain need to have a shared sustainability vision and goal. Supply chain leaders can consider the above mention strategies to reduce their waste and optimize their processes.

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Nikhil Sonawane

Nikhil Sonawane is a Tech Journalist with OnDot Media. He has 4+ years of technical expertise in drafting content strategies for Blockchain, Supply Chain Management, Artificial Intelligence, and IoT. His Commitment to ongoing learning and improvement helps him to deliver thought-provoking insights and analysis on complex technologies and tools that are revolutionizing modern enterprises. He brings his eye for editorial detail and keen sense of language skills to every article he writes. If he is not working, he will be found on treks, walking in forests, or swimming in the ocean.

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