How to Create a Supply Chain Competitive Advantage

The Blume Global Team | January 21, 2019

Data insights. Agility and precision in decision-making. Amazing customer experiences. Software is the key enabler of these things for companies to enjoy a supply chain competitive advantage and gain visibility and orchestration from the first mile to the last mile of their shipments.

While supply chains share some common similarities, each supply chain is also unique in its specific combination of manufacturers, raw materials, logistics, organizations and goods. There are many points of differentiation in your supply chain, but the question is how can you use that to your competitive advantage?

In this article, we’ll dig into some of the unique aspects of a supply chain and explain how you can use those distinctions and differentiations to gain a supply chain competitive advantage and maximize profits.

You’ll learn how to take advantage of:

  • Manufacturing of raw ingredients, materials and other goods
  • Logistics arrangements, whether that’s in-house or third-party
  • Changes in supply and demand management
  • Operational processes within and between supply chain organizations
  • Relationship management with supply chain stakeholders
  • Documentation and administration in the supply chain

In-House Versus Outsourced Manufacturing

Some larger organizations have the capital and resources to manufacture their own products, either from raw ingredients or pre-made parts. Other organizations will typically outsource their manufacturing to white-label providers.

Supply Chain Competitive Advantage From In-House Manufacturing

There are several ways to leverage your in-house manufacturing capabilities:

  • Carry out deep analysis of every aspect of the manufacturing process to identify issues and bottlenecks
  • Introduce managed continual improvement processes to enhance manufacturing speed, quality, accuracy and efficiency
  • Take advantage of efficient product development through early prototyping, iterating and testing on product designs and new features
  • Maximize cost control of materials, people, equipment and manufacturing processes

Supply Chain Competitive Advantage From Outsourced Manufacturing

Supply chain management can streamline processes and relationships with external manufacturers, too:

  • Implement strong, robust service level agreements with penalty clauses for failing to meet efficiency or quality goals
  • Take advantage of economies of scale to get lower-cost manufacturing, especially if completed overseas
  • Scale up manufacturing more quickly as demand grows
  • Put contingency planning in place with other manufacturers in case issues prevent your existing manufacturer from meeting targets

Integrated Logistics Versus Outsourced Logistics

Building up internal warehousing, logistics and distribution is a major undertaking. Other businesses may choose to outsource some or all of their logistics needs.

Supply Chain Competitive Advantage From Integrated Logistics

Although resource-intensive, integrated logistics offers up some big advantages:

  • Manage the distribution fleet to ensure rapid collection and delivery of goods to downstream organizations or end customers
  • Ensure safe, secure and environmentally-appropriate storage for all raw materials, ingredients and products
  • Get greater visibility of goods wherever they are in the storage or distribution system
  • Avoid paying unnecessary overheads that increase the profits of outsourced logistics companies

Blume Assets enables carriers, service providers and enterprises to manage their key assets—including containers, chassis, trailers and more—across the entire supply chain lifecycle. Additionally, it provides accurate and dynamic asset tracking, financial management and maintenance and repair.

Supply Chain Competitive Advantage From Outsourced Third-Party Logistics Providers

It may be slightly harder to realize advantages from third-party logistics (3PL) providers, but it’s still possible:

  • Use warehouse and storage flexibility to adjust storage and distribution needs in line with customer demand
  • Move goods around the 3PL warehouse and distribution network so they’re closer to customers
  • Take advantage of existing relationships between the 3PL provider and their partner organizations
  • Negotiate through economies of scale to bring down logistics costs and arrange for fixed pricing
  • Use IoT devices for visibility into the location, transfer and timeliness of goods

Blume solutions give logistics service providers granular visibility of their shipments, real-time shipment updates, proof of delivery and related documents through photos and IoT technology. Read the customer story.

Flexible Supply and Demand Management

Good supply and demand management is essential to managing inventory levels, keeping enough stock, ensuring short manufacturing cycles and getting products into the hands of consumers.

Supply Chain Competitive Advantage From Flexible Supply and Demand Management

There are several ways to leverage good supply and demand flexibility to stay ahead of rivals:

  • Get early sight of new product releases and marketing efforts to ensure stock levels will meet demand
  • Measure seasonal supply and demand trends and use AI modeling and machine learning to predict demand
  • Prepare manufacturers and other suppliers for increases in demand and bring in other organizations to deal with scaling up production
  • Use predictive and prescriptive analytics to understand the impact of supply and demand on the overall supply chain and optimize SCM

Blume optimizes assets, logistics and supply chains with AI- and ML-driven matching for assets and transportation legs. For LSPs that need to minimize empty container moves and manufacturers that need to streamline supply chain operations, Blume Optimization helps minimize costs, maximize capacity and improve agility.

Supply Chain Process Management

Supply chain managers spend a substantial amount of time managing supply chain processes. It’s not surprising that understanding and streamlining those processes can result in huge productivity and cost savings.

Supply Chain Competitive Advantage From Efficient Supply Chain Process Management

The main advantages here come from visibility, reducing waste, streamlining and reducing rework or duplication:

  • Measure every organization throughout the supply chain to identify holdups and inefficiencies
  • Build supply chain improvement initiatives into contracts and service level agreements with other organizations in the supply chain
  • Capture documents, metrics, contracts and other details in the blockchain for maximum visibility and verifiability
  • Move organizations onto a single, integrated supply chain management software platform to avoid rework, manual errors or duplication of effort
  • Use machine learning and artificial intelligence to query datasets created by supply chain processes and provide options for streamlining operations

Blume Visibility removes dark areas and provides clear visibility across every move, mode and mile by tracking events, predicting ETA, flagging exceptions and facilitating proactive resolution of disruptions. Unparalleled network visibility and intelligent execution help improve supply chain performance, resilience and responsiveness.

Supplier Relationship Management

Good relationship management between suppliers and manufacturers will streamline the production and flow of goods and remove friction.

Supply Chain Competitive Advantage From Strong Supplier Relationship Management

Treating suppliers like partners and collaborators is an excellent way to get them integrated and prepared to take extra steps to ensure quality and speed:

  • Pay suppliers promptly when blockchain or IoT technology determines that goods have been shipped or received
  • Use integrated natural language processing to overcome language and other barriers with suppliers
  • Partner with suppliers on quality improvement initiatives and fund process optimization
  • Request visibility into supplier datasets for manufacturing and other processes, then carry out analysis and provide intelligence and insights back to the supplier

Blume Logistics creates a robust network for logistics tendering, tracking, event capture, POD verification and settlement initiation. By connecting a global ecosystem of multi-modal carriers to manage every move, Blume Logistics unites carriers—from ocean to rail to long haul—with first- and last-mile drayage for real-time event and cost tracking.

Supply Chain Document Management

The supply chain generates a huge amount of documentation, including contracts, shipping notifications, bills of lading, purchase orders, service level agreements and much more. Supply chain management can significantly reduce the administrative overhead to speed up document processing and streamline the production and transfer of goods.

Supply Chain Competitive Advantage From Reducing the Burden of Document Management

Nobody likes producing or managing documents, so there’s plenty that can be done to make the whole process less painful:

  • Implement chatbots with natural language processing to capture and process essential information from upstream and downstream organizations
  • Translate documents into other languages using machine learning
  • Capture and verify documents on the blockchain including digital signing and tracking
  • Integrate documents like bills of lading or shipping notices with unique identification through IoT devices or other tags
  • Measure performance against service level agreements in a centralized location for greater visibility of targets and thresholds

Blume Finance enables transparency and granular visibility for freight audit and pay with a smart contract repository, rating management and validation, machine learning-driven invoicing, cost accrual auditing and blockchain-enabled payment and settlement.

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