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Supply Chain SOPs

Supply Chain SOPs

Significance of having a Robust Supply Chain

It was only a few years back that the implications of having robust supply chains were demonstrated during the Covid-19 pandemic. Governments and organisations with robust supply chains could distribute essentials like food, medicines, and water without major hiccups. Was it a chance? Was there conscious planning? How some organisations could adapt and the majority of others could not? Planning and strategic changes provide half the answer; the other half is the operational framework i.e. in this case, the supply chains.

As supply chain consultants, we always ask our clients to use the year 2020 as a reference to gauge the operational preparedness of their supply chains. Some of the pertinent areas they should be reassessing are:

  • Broad challenges faced during the lockdown and curfews
  • Difficulties in getting stocks on time
  • Issues related to storage, distribution, and delivery
  • What worked, what did not work

Is your business prepared to deal with such shocks in the future? Do you have the strategies accompanied by the necessary operational planning? What is the current state of the supply chain operations planning of your organisation?

What makes a Supply Chain Robust and Reliable?

Supplier Compatibility

‘The entities involved in the supply chain play vital roles in the value chain as well. It is important for businesses to keep a tab on the compatibility of these entities with their strategic and operational requirements. And to do that, businesses must periodically monitor the performance and capabilities of their vendors and suppliers on the parameters of current requirements as well as future readiness for smooth supply chain operations. The solution for this is to plan and implement a deliberate process for the selection of suppliers and periodical performance audits.

Logistical Flexibility

Logistics is an important component of supply chains and deals with the transportation of inventory from one place to another. If logistics stops, the supply chain also stops. There are many reasons why logistical movement slows down, delays, or comes to a complete halt. These reasons could be changes in business strategies, change(s) by/of logistical service providers, bad weather, strikes by associations, regulatory changes, etc. By incorporating the element of flexibility, businesses can lessen the risk of exposure to such logistical risks. The workaround is to assess the possibility of such events happening in the future, develop backup strategies, and incorporate the necessary flexibilities in the operations planning.

Storage Capabilities

The success of the logistical function is also influenced by storage capabilities – whether these capabilities are owned or hired. For instance, if the required storing capabilities are not accurately measured, there is nothing the purchase or the logistics department could do to address the problem in the event of unavailability of space in warehouses and fulfilment hubs. For a supply chain to have strategic significance, planning and decisions related to storing capabilities like volume, location, variety, security, and safety assumes high importance.

Use of Technology – Automation & Digitisation

The use of digitisation and automation tools and technologies in supply chain operations helps businesses in numerous ways. It helps redirect human involvement from repetitive and tedious tasks towards more relevant areas like planning and empathy. Optimising human involvement via digitisation and automation also decreases the exposure to slip-ups, errors, and omissions.

In supply chains, transparency and ease of access to process information are necessary. This involves substantial efforts in the form of planning and building rules and systems for communication and connectivity among all concerned teams and entities in supply chains. Automation and digitisation of supply chain operations make this job easier. Every unit of data and information that goes into the servers from all corners of a supply chain becomes a part of the bigger software ecosystem. This way the information that is required to be available becomes available to all concerned task owners in all processes in almost real-time. Another benefit of automation and digitisation of supply chain operations is the availability of data for analytics purposes.

Standardisation of Supply Chain Processes

Process standardisation is the principle and practice of upholding the same sets of operational procedures for the same processes and operations in all places of business operations. For instance, two warehouses/distribution hubs must not maintain different standards for quality control for the same product category. There may be exceptions but as a tenet, processes must not radically differ within one ecosystem.

Process standardisation in supply chains provides uniformity and consistency in the handling of inventory and inventory-related data within an organisation. Some of the benefits of standardisation of supply chain processes are listed below.

  • Ease in the observance to policies and processes governing supply chain operations
  • Aids in maintaining brand QA and QC standards
  • Establishes a common framework for proper handling, storage, and transportation
  • Reduces unplanned checks and control
  • Provides a standardised scale for adjustment of timelines for order fulfilment

Quality Assurance (QA) & Quality Control (QC)

Both Quality Assurance (QA) & Quality Control (QC) are integral elements of supply chain management and operations. At every stage in a supply chain journey, goods must go through the designated QA and QC screens. That is the ideal or model picture. The presence of the necessary QA and QC measures at every stage is one of the hallmarks of a good and reliable supply chain. If any product lot misses the quality check that should have been conducted at a given stage in the supply chain, the chances of detecting that lot again is leaving things to luck. Subsequent stages in the supply chain may or may not be able to detect that lot. Well-defined QA and QC processes help prevent such occurrences.

Demarcated Roles and Responsibilities

Every team and individual engaged in a supply chain function is confidently aware of the standards and performance expected of them when their roles and responsibilities are clearly established and communicated. With an unambiguous understanding of roles, duties, and responsibilities at all levels, performance of and coordination among individuals, teams, and departments significantly improves in organisations. The scope of disputes is minimised and the focus remains on the work. And job descriptions are not enough to tell someone what their ground responsibilities are. These should be included in process definitions.

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Operational Reasons for Failure of Supply Chains

Slip-ups in the selection of vendors and suppliers

No organisation should engage or be associated with suppliers that do not align with their business requirements. There could be many reasons why some suppliers may not be compatible with a business enterprise while some others are. It could be because of requirement mismatch in the areas of commercial/financial aspects, quality of products, logistics, legal, etc. If there is no process, businesses are not able to filter and select the right suppliers. This makes it essential that the right factors are duly taken into consideration in the selection of suppliers and vendors.

Lack of well-defined processes

One of the main reasons for a waning supply chain is the lack of well-defined processes for carrying out supply chain operations. Having well-defined processes (supply chain SOPs) help businesses implement their supply chain plans and strategies with higher precision. Supply chain SOPs also serve as the groundwork for supply chain automation. It is at the time when businesses begin thinking of supply chain automation, do they realise the significance of being process-oriented with SOPs for supply chain operations. Faltering supply chain operations is also another point of that realisation.

Misfit technology (software)

Experienced supply chain SOP consultants would agree many organisations continue with their misfit automation software for supply chain operations. And the corrective measures and adjustments are left as the responsibility of the concerned process owners. The purpose of automation is defeated when any incorporated technology is not accurately helping an organisation achieve its operational standards. The true goals of automation are to do more complex and massive tasks, speed up operations, facilitate coordination, improve operational accuracy, etc. And if humans have to intervene in unplanned methods, it belittles the other benefits offered by digitisation and automation.

Lack of clarity in roles

Maintaining clarity and transparency in job descriptions, roles, and responsibilities is as important in supply chain management as it is for any other enterprise function. Failing to achieve this has many unwanted consequences on supply chain operations and management:

  • Slow and haphazard operations
  • Overlapping of roles and responsibilities
  • Failure of reporting and supervising mechanism
  • Pointless and avoidable meetings
  • Poor information-sharing between processes
  • Inability to meet deadlines
  • Chances of failure to comply with QA and QC standards

Lack of Process Documentation

When operations are not properly drafted and documented, there will always be obscurity about carrying out the processes and missing operational details. This leads to spending additional efforts and resources for getting things done which could have been planned in the first place. Some of the consequences of not having documented processes on supply chains are:

  • No reference to look up to for operational standards and procedural details
  • Errors and variations in process output
  • Sloppy adherence to logistical and delivery timelines
  • Greater need for manual supervision and cross-checking
  • Extended working hours

Lack of Process Standardisation

Having different processes for the same activity is an unorganised approach. It is neither easy for employees nor for business associates to have to follow different or undefined procedures for the same task. It also affects the customer shopping journey and customer experience. Such variations hinder the efforts of creating a cohesive and consistent brand perception. And one of the reasons for this is the lack of standardisation or consistency in carrying out business processes.

How YRC can help

YRC is a retail and eCommerce business consulting enterprise specialising in process-SOP solutions. In supply chain consulting, we offer a wide range of solutions including SOP development and implementation assistance. Our service objective here is to deliver operational excellence and process orientation via SOPs. The service design and delivery are carried out by a team of supply chain process consultants. Here is a snap of what we do and how we do it.

Evaluation of the As-Is Processes and Business Practices

The present supply chain processes and their capabilities are mapped and defined. In doing so, the first goal is to optimise the need for change. The second goal is to make it convenient to identify the areas of process improvisations. The existing business practices and process resource necessities are laid out. Before moving to improvisations and adjustments, it is imperative to consider processes in their prevailing states.

Defining the new Process Objectives

Here, we define the new and improvised process objectives. A detailed analysis of the strategic requirements is conducted to incorporate the new operational prerogatives and standards into the new process definitions.

Process Gap Analysis & Development of To-Be Processes

In process gap analysis, we carry out a comprehensive analysis of the deviations that exist between the as-is processes and the present business practices as against the freshly-identified process objectives and requirements.

In the next step, our team develops the to-be processes using SOPs (Standard Operating Procedures). The information and insights derived from process gap analysis are crucial for writing new process definitions.

Assistance in Process Automation and Digitisation

We offer expert and systematic assistance in identifying and implementing best-fit supply chain automation and digitisation solutions. Our team of SCM consultants scrutinises the new processes on the parameters of the IT landscape and presents the most suitable solutions. The knowledge and skill sets required to use these software/automation platforms are also presented.

To know more about our supply chain SOP consulting services and how we can help your business with supply chain SOPs, please drop us a message and we will reach out to you.

FAQs

What are the features of a robust supply chain in business? How do you build a strong and agile supply chain? What makes a supply chain resilient?

Given below are the top 7 desirable features in a supply chain:

  •             Agility to adapt to small and big changes
  •             Flexibility in the logistics and distribution
  •             Ability to expand or contract storage capabilities with ease
  •             Powered by automation and digitisation
  •             Process Documentation and Standardisation
  •             Deployment of QA and QC checks
  •             Defined Roles and Responsibilities
What causes failure in supply chain management? What are the main problems of/in supply chain? What are the challenges/problems in supply chain management? What is the root cause or reason for crisis in supply chain?

Here are the top 6 operational reasons for the failure of business supply chains:

  •         Slip-ups in the selection of vendors and suppliers
  •         Lack of well-defined processes
  •         Misfit technology (software)
  •         Lack of clarity in roles
  •         Lack of Process Documentation
  •         Lack of Process Standardisation

Benefits of Standard Operating Procedures (SOPs)

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    PROCESS AUTOMATION

    The idea of having Ecommerce Consultants on-board from the beginning itself points towards reducing the involvement of the promoters in daily operations. Ecommerce Businesses willing to be a brand reaping profits & sustaining the competition must ensure that most of their processes should be automated. The more the manual intervention, the more would be the errors.

    In Ecommerce business, you get only 1 chance to impress the customer & if you mess up there, you lose the customer for long.

    Process automation in respect to all the activities pertaining to customers from order receiving to order fulfilment is a must for a seamless experience for the customers.

    Task Management is another grey area where most deadlines fail as 90% of the tasks are assigned manually & are forgotten, unheard, misunderstood or mistaken.

    YRC Team of Ecommerce Management Consultants helps to make maximum of the processes system-driven to ensure minimalistic manual intervention.

    VIDEOGRAPHY & PHOTOGRAPHY

    No matter how good your product is, the customer would know only if it looks good.

    Photography includes the following steps:

    • Cataloguing your products
    • Cataloguing your images
    • Backup your images (A few cloud storage solutions include Dropbox, Google Drive, Bitcasa, Apple’s Cloud Storage etc.)
    • Choose the right camera & lens (You may also outsource the photography to a third party agency)

    DIGITAL MARKETING

    Digital Marketing includes SEO & SMM. SEO i.e. Search Engine Optimization includes activities like back-linking, meta tags, blog-writing etc. to ensure your website ranks on the 1st page on Google Search.

    Next comes SMM i.e. “Social Media Marketing” which as the name suggests including promoting your products on all the social media sites, email marketing, influencer marketing & several other BTL activities.

    These activities are going to be recurring & would decide the traffic on the website, the conversions, whether the right target market is tapped, the likes, the views, the orders, the reviews & much more. YRCs Ecommerce Consultants create a budget for digital marketing right from pre-launch to launch & for each month thereafter.

    Building digital marketing strategies in coordination with the agency, selecting them to signing them off would be the role of YRC.

    This ensures seamless coordination, detailed interactions & desired execution as it is always advisable to work with a single agency than multiple of them.

    IT INTEGRATION

    Selection of the right software for smooth functioning of back-end operations right from production to webstore display would be suggested and integrated by YRC Team.

    YRC’s Team defines SOPs of Product Movement, maps it with the locations & people. They then create a blueprint of all the features required in the software & help in shortlisting & selection.

    IT Integration involves connecting your offline inventories with real-time online webstore so when a sale occurs, inventories get deducted real time across offline as well as online platforms.

    This helps in accurate inventory management, maintaining the MOQs, re-order levels & achieving the optimum inventory levels.

    Some popular software include unicommerce, viniculum for your front-end website management & Genisys for your entire back-end Purchase, Production, Accounting, Invoicing etc. management.

    WAREHOUSE & LOGISTICS PLANNING

    • How many cities or countries you wish to sell in?
    • Where should your Warehouse be located?
    • Should you have one warehouse in each country or city?
    • Should you be having your own delivery team in your base city?
    • Would the 3rd party vendors be reliable? What happens when they lose or misplace your product during delivery?
    • How should I manage the logistics if my goods are coming from different countries?
    • How should the goods be stored and barcoded?
    • How much space do I require for warehouse?
    • I am sure several such questions must be haunting you while you think of starting your own fashion ecommerce brand.

     

    At YRC, our warehousing and logistics experts can help you devise a strategy for all of the above mentioned queries and much more.

    We design the layout of the Warehouse considering the inward, goods processing, software entry, barcoding, outward, goods return, scrap storage, goods stacking & much more.

    Logistics route plan is devised considering the manufacturer to your warehouse and from there to last mile delivery locations.

    UI & UX DESIGNING

    This Step involves 03 distinct parts:

    Part 1: Choosing the right Platform:

    From several platforms available in the market right from Shopify to magento, woocommerce, prestoshop, wordpress etc. you must choose the one that fits best for your business

    Part 2: UX Designing:

    “UX” denotes User Experience, which if put in simple language is building the functional requirements of the website.

    UX Designing includes designing the features required in the website, customer journey map, website features, the browsing features, navigation features, ecommerce order management process flow, checkout cart features, catalogue management, ecommerce payment system, cross selling features & much more.

    “As per statistics, 68% of the customers abandon the carts before payment”

    An interesting UX ensures the customer sticks on to the website for a longer time.

    Part 3: UI Designing:

    UI stands for User Interface, which means designing the look and feel of the website. UI includes using the right colours, elements and the entire aesthetics of the website.

    A good User Interface ensures the user completes the task that he has come for. It navigates the user through the journey of the brand in the simplest but most effective way.

    The UX designer maps out the bare bones of the user journey; the UI designer then fills it in with visual and interactive elements.

    If User experience is the bare bone, user interface wraps it up with an attractive cape.

    At YRC, our team if experts can help you develop the entire User Journey to ensure it is engaging!

    SAMPLING & PRODUCTION

    This step follows the “Designing” Phase, whether you have an in-house design team, freelance designers or an outsourced design company. It is one of the most exciting phases, as here you see your designs turning into products & your ideas turning into reality.

    In most start-up cases, production is outsourced i.e. brands tie-up with the established manufacturers/ job-workers to get their products manufactured.

    Sampling involves multiple 04 Stages, Fit-Sample, Prototype Sample, Pre-Production Sample & the Production Sample.

    Prototype Sample is the first sample provided to the buyer. It can be in any fabric/ colour. This sample is just to understand whether the product design looks equally great in reality.

    Fit Sample, as the name suggests is prepared to check the fit of the garment i.e. the various sizes, length, width etc.

    Pre-production is made by the actual production line. Here the stitching quality and other aspects related to manufacturing are checked. This is the last stage where rejection can be accepted.

    Production Sample is made before the production which is the replica of what is going to be finally produced.

    Once you are through with all this, you are good to go ahead & get your goods manufactured.

    PRODUCT DESIGNING / SOURCING

    Product Designing or Sourcing is the heart of the Ecommerce Fashion Brand.

    Product Designing / Sourcing can be done in several ways, as follows:

    • In-house Design Team
    • Freelance Designers
    • Outsourced Design Team
    • Ready Product Sourcing (From Manufacturer or Wholesaler)

    At YRC, we evaluate your business strategy & business model to arrive at the decision, which of the above ways would be best-fit for your business. In certain cases, product sourcing may be a combination of the above.

    These are the people who are going to build your brand! Whether they are the designers or merchandiser, your brand look is going to be in their hands.

    If you are designing each garment from the scratch, the sourcing would play crucial role in developing design identity of your brand.

    Sourcing includes fabric, trims, lining & all the raw material required to build the garment.

    BRANDING

    Branding is the “Look of the Brand”, right from logo to tagline, the colours used, the brand story, the brand communications on social media, the packaging & all the other aspects which speak directly or indirectly to the customers. Branding constitutes the look & feel of the brand & hence must be thoughtfully planned to match with the product that we are selling.

    Branding must appeal to our target audience. Example : A golden colour logo depicting finesse, art, richness, premium, however beautiful it may be individually cannot go with a brand selling affordable kids wear products. So, your logo must be in-line with your brand positioning, whether you are an expensive brand or a luxury brand or a value for money brand, it must be depicted from your “Branding”.

    It is an integral part to attract the target audience.

    ORGANOGRAMS & SOP’s

    Organogram is the “HR Blueprint” of the business which is created at the onset, to map out the team required across each function at various stages of the business. At the launch, only key people need to be got on board to ensure the project gets started & at this stage, all of them need to multi-task. Similarly, certain financial as well as operational goals are set for addition of the further team. Example, for the operations team, we hire 1 operations manager during the pre-launch phase & we add 1 more only when the business kicks-off & we reach a volume of selling more than 1000 pcs/ month or a turnover of more than 0.1 million USD.

    SOPs are Standard Operating Procedures, a bible to run the entire organization right from Sales, Purchase, HR, Order receiving to Order fulfilment, Inventory Management, Accounts, Warehouse, Logistics, Supply Chain, Production & all the other relevant functions for the business. Business must be organized from its first day of operations; only then the tasks can be delegated.

    At YRC, we design the organization structure, the processes, and approximate time taken to execute each process, job profile of every member within the organization, their KRAs, KPIs & the Reporting Structure.

    CRITICAL PATHWAY

    Critical Pathway Analysis (CPA), is a project management technique which cannot be overlooked while launching an ecommerce fashion brand. Brand launch process is cumbersome with multiple inter-dependent & time-bound tasks involved, which need to be tracked to ensure the project remains on track.

    CPA outlines key tasks across the project, their turnaround time (TAT) & the dependencies of tasks upon each other. It identifies the sequence of tasks, their interdependent steps from inception to completion, their criticalities, and their dates of onset, target dates of completion along with the key responsible person for the respective activities. Critical Pathway helps in understanding the unimportant & not urgent tasks which may jeopardize the execution of the project because of an unexpected snag! It also maps out the potential bottlenecks which might be posed because of the dependencies of tasks upon each other & cases where the next task cannot be commenced before the completion of the previous one.

    CPA detects the minimum & the maximum time involvement of a particular individual or team to execute the task, thereby arriving at the overall deadlines associated with the project.

    At Your Retail Coach, we design the Critical Pathway & review it periodically to ensure the project is on track & the progress is measurable.

    BUSINESS STRATEGY & BUSINESS PLAN

    Business Strategy includes the vision, mission, goals, business model, business plan & strategy for all the functions within the organization.

    Business Strategy is a well-defined plan that outlines who, what, where, why, how & when for the company; for example, who would be the target market, how to attract the target audience, when to launch new products, where to operate from, how to handle competitors, what would be the USP, what would be long term goal of the organization & several other answers to the 5Ws of Strategy.

    Business Strategy aligns the organization towards a common goal. Business SWOT helps company to identify & overcome their weaknesses & focus to sharpen the strengths. Business strategy forecasts future risks and helps business in building skillsets to overcome the potential threats.

    YRC’s Business Plan focuses on creating a “Blueprint” of the business, thereby deriving the feasibility of the concept & gauge whether the opportunity is lucrative to invest time, energy & effort. Business Plan creates cash flow understanding i.e. building inflow & outflow cash projections from Week zero to week 60 i.e. 05 year projection. Business Plan calculates the capital investment, operating costs, one-time costs, recurring costs & all the other numbers relevant to obtain the breakeven sales, return on investment, return on capital, internal rate of return & several other ratios. Business Plan is also one of the important requirements if you are targeting the “Investor Route”. Fund raising becomes extremely transparent & channelized. With business plan panned out clearly, the business will know until what point must it be stretched & where to stop, which reduces the probability of unplanned investments.

    MARKET RESEARCH

    Starting the concept of Ecommerce Fashion brand with Market Research ensures we get detailed understanding of the industry & this research report also acts as a social confirmation for your concept. Market Research helps in understanding the target locations, their population, potential online buyers for your product, competitors for each category, and top selling products of the competitors, competitors’ price range, offers & their responses & much more. Market Research helps in thorough understanding of your brand position as compared to our competitors. It helps in identifying gaps in the market, in your category along with the scope of the said product in the desired market. This will help in validation of your concept & prevents you from making the same mistakes as your fellow brands, eventually saving your time, energy & efforts. This phase is also a make or a break phase, as the market research study may at-times come up with some eye-popping numbers & statistics which might compel you to re-think on your product or category that you are planning to sell or alter your entire concept itself!! Market Research Reports analyse the competitors’ webstore for their traffic, conversion & sales. This is extremely valuable information to derive our inventory budgets & projections, which takes us to our next phase.