Supply chain bottlenecks are disruptions that slow down your supply chain flow. Common causes for these bottlenecks related to products, information or financials. As each supply chain operation is unique, it is likely to have bottlenecks where one standard solution cannot be defined for all businesses.
Supply chain bottlenecks are commonly experienced due to poor storage methods, poorly developed Standard Operating Procedures (SOPs) and undefined inventory norms, limited resource networks, inefficient manpower, lack of supply chain transparency and gaps between demand and supply.
The identification and management of bottlenecks require industry expertise as well as investing a considerable amount of time to avoid them. This can be challenging when managing your core function. Engaging a third-party logistics (3PL) provider can assist businesses to manage specific bottlenecks to ensure their customer’s supply chain remains efficient and improves customer satisfaction levels while saving time, energy and costs caused by bottlenecks.
1) Identify your bottlenecks
Every supply chain is unique. Supply chains can be differentiated in terms of product flow, operations type and bottlenecks, and require solutions accordingly. Undefined bottlenecks are likely to lead to unnecessary hurdles and waste time, energy and costs. Therefore, logistics solution and Supply Chain Managers need to analyse their supply chains and determine potential bottlenecks.
Proactive supply chain professionals know that well-established third-party logistics providers have years of expertise in assisting businesses to identify any potential bottlenecks. Their industry experience enables them to proactively plan, prevent or navigate around the bottlenecks to ensure smooth supply chain operations are maintained.
2) Learn from historical supply chain information
There are multiple methods to identify and deal with supply chain bottlenecks. However, given each supply chain is different; the most strategic way to identify potential bottlenecks is to learn from your own past supply chain history.
Your businesses records are likely to have captured various bottlenecks, solutions deployed and time taken to solve those bottlenecks along with your demand and supply data. A third-party logistics provider is likely to be able to assist by analysing your data and identifying what is relevant and how your solution needs to be modified.
Even in the absence of such data, third-party logistics providers can assist by using their industry knowledge and experience to overcome bottlenecks to ensure your supply chain flow remains uninterrupted.
3) Outsource to reliable and experienced 3PL partners
Effective end to end supply chain operations requires expertise, vast resource networks, IT infrastructure and high management skills. Lack of these resources is likely to create bottlenecks and therefore an inefficient supply chain.
To overcome this lack engage a reliable and experienced third-party logistics provider. Third-party logistics providers are readily equipped with all these resources and expertise so they can manage bottlenecks and allow you to focus on your main business objectives.
4) Develop a robust plan
Unplanned, random actions or reactions to bottleneck situations may lead to short-term fixes but may have a huge negative impact on your supply chain operation in the long-term.
To ensure that the impact of every action is well-thought-out before implementing it, bottlenecks need to be proactively identified, and all available options need to be discussed before finalising one or more solutions.
Third-party logistics (3PL) providers can be of great assistance as they bring experience, expertise and knowledge of the possible impact of each solution in short and long-term can have on your supply chain.
Engaging an experienced third-party logistics provider can assist you in developing a steady and robust plan to manage the bottlenecks efficiently.
5) Build a transparent and flexible supply chain
A transparent supply chain (including transportation management) gives clarity in terms of product, information, document flow, storage and management. This transparency also delivers the ability to identify bottlenecks as well as the root cause. Blockage inflow can be easily identified in a transparent supply chain and can then be dealt with proactively.
However, not all bottlenecks can be identified beforehand. Some bottlenecks arise suddenly and must be handled after they surface. A transparent and flexible supply chain assists to quickly identify these bottlenecks as soon as possible so they can be handled with minimum impact.
Expert third-party logistics providers assist in building these transparent and flexible supply chain processes by deploying systems, processes, reporting, analytics, experience and expertise.
In a supply chain, bottlenecks are likely to weaken a supply chain flow and demand more time, attention and energy. Timely identification and proactively dealing with these bottlenecks can assist to fasten the flow and improve the overall supply chain.
Innovative third-party logistics providers can help you identify bottlenecks. Additionally, they can provide management skills and advanced planning processes to help you avoid bottlenecks.