It’s a familiar story. A supervillain is on the loose, causing havoc and terrorizing everyone in sight. At the last minute, the hero arrives to save the day! Today, it’s supply chains that are under attack. Supply chain supervillains—threats like inventory inaccuracy and complicated catalogs—are aiming to disrupt your productivity and profitability. Don’t let them.
How data-driven solutions fight efficiency’s worst enemies
We’re all under pressure to streamline the supply chain, right? To get things running smoothly, cut costs, and improve cycle times. Unfortunately, supply chains are constantly threatened by some real “villains”—issues that disrupt productivity and profitability. Read on to discover four supply chain supervillains—and the heroes that can handle them all.
Shrinkage
Whether caused by damage, fraud, or an unintentional error, shrinkage is a supply chain supervillain. No matter the cause, losing inventory directly impacts the bottom line. A business operating on a 5% margin must generate 20% more sales for each 1% of shrinkage.
Your hero: The best way to prevent shrinkage? Data collection. With modern data collection technology, audit trails for individual products, tools, and equipment can easily be created without interrupting workflow.
| Median | Best-in-class companies | |
| Shrinkage as a percent of total inventory[i] | 0.2% | < 0.005% |
Chargebacks
Chargebacks happen when something goes wrong. Product may be labeled incorrectly, delivered off-schedule, or may not comply with Advance Shipping Notice (ASN) requirements. No matter the cause, chargebacks can cut into margins and cause cash flow problems.
Your hero: Integrating data collection systems with business planning programs (such as ERP or WMS software) makes it possible to automatically generate an accurate ASN for every shipment. Data collection systems have resulted in a 54.3% reduction in chargebacks in some instances.[ii]
Complicated catalogs
Providing a broad product range for your customers is wonderful. It can, however, present a headache to your sales and field service teams, especially when it’s time to order replacement parts or determine compatibility. With an increasing emphasis on product personalization and customization, product catalogs are more complex than ever.
Your hero: In complex environments, static catalogs just don’t get the job done anymore. A purpose-built app or site is often the solution. These custom product interfaces can give specifications, answer compatibility questions, and provide instant sales support.
Inventory inaccuracy
Without accurate, up-to-date inventory, streamlining your supply chain is difficult (if not impossible). In a poor-accuracy scenario, avoiding stockouts requires keeping a large inventory. Unfortunately, this makes achieving high accuracy even more difficult. Poor-accuracy scenarios result in ineffective cycle counts, poor inventory turnover, and inefficient picking processes.
Your hero: Inventory inaccuracy is a vicious cycle. The best way to break out? Replace manual counting processes with automated data collection technology—barcode or RFID scanners. These devices regularly achieve over 99.9% data accuracy, and enable faster count execution[iii]
If you need a hero to help you streamline your supply chain, look to The SMS Group. The SMS Group focuses on bringing clarity to business. With nearly 30 years’ experience in data collection and integration, The SMS Group can help you achieve more transparent processes, an improved bottom line, a leaner, more cost-effective production system, increased on-time delivery, and better customer service. To learn more, call 937-498-2700 or visit us at www.thesmsgroup.com.
References
[i] Werc.org. Metrics, Benchmarking, and Best Practices. http://www.werc.org/assets/1/Events/Metrics_Benchmarking_10_2014_NTEXAS.pdf
[ii] Langer et. al 2007. Assessing the Impact of RFID on Return Center Logistics
[iii] Zebra Technologies 2010. Enterprise-Wide Data Collection and RFID/Bar Code Printing for SCM. https://www.zebra.com/content/dam/zebra/white-papers/en-us/ent-wide-data-collection-en-us.pdf
