It’s been a rough couple of weeks, both here in the US and around the world, as coronavirus-related disruption seems to expand with every passing day. Naturally, after taking care of family, friends, and at-risk communities, our thoughts turn to the financial impact of the pandemic on our favorite businesses and brands.
It’s a question many business owners ask themselves but too few take the time to examine some important questions behind the question.
There any number of signs that it might be time to contract out your pick, pack and ship activities to a dedicated service provider. Some are practical and quantifiable, others emotional and intangible, but all have a direct impact on where you spend your valuable time and how you service the customers who will define your future success.
Supply chain metrics aren’t always high on the list of operations managers or small business owners. After all, there’s plenty of pressing real world work to be done on a daily basis, without adding the need to put a number on each and every activity.
As long as the product gets where it needs to go and the cogs keep turning, the supply chain is working right, right? Unfortunately that’s not always the case (and even if it is now, it won’t always be!)
Measuring and drawing meaning from the right numbers is important for anyone seeking to better understand their operations and flag areas for improvement. When we talked about ways to cut supply chain costs earlier this year, measurement was a crucial element.
Managing by Measuring
Putting numbers to your operational activities provides a tangible way to regularly review performance.
But knowing where to begin can be difficult. There are potentially hundreds of valuable numbers to track and limited resources to track them. And then there’s the analysis paralysis that often comes with getting too heavily into . Finding a balance between the two is the key, and it follows from measuring only what matters.
Even if you have several objectives, try to pick the top two or three and work6 backwards to create suitable measurements for each. Whether the goal is to improve efficiency, reduce delivery time, or a broad range of
The next question is what metrics to put in place to measure what matters to your company’s supply chain.
Supply Chain Metrics
Some examples of what you might measure are:
Percentage of shipments on-time,
Average delivery lead time,
Order error rates,
Order fill rates,
Supply chain adaptability,
Returns processing costs,
Customer satisfaction levels,
Customer retention rate.
There may be many more areas important to your business. In order to zero in on the right measures you’ll need to convert mission statements and primary operations objectives into numbers that accurately explain them. Some of these are tougher to translate from statements to metrics than others.
In some instances, you may have existing measures that can be adapted to tell a wider story of what’s happening in your supply chain. Individual reports could be combined into a monthly review to bring together different areas of your operation.
Creating a list of items that can be measured specifically, feeding into an overall metric that you will use to gauge progress towards the end objective, is a far more effective, useful analytics approach than simply gathering together a suite of basic headline numbers.
Meaning Over Metrics
Finally, having gathered a group of metrics that give you a foundation to review your supply chain operation, the next challenge is to derive meaning from the numbers.
Remember that the goal should always be to understand what the metrics mean in terms of movement in your desired direction, not just an arbitrary shift in an individual number.
Combining meaningful metrics with a long-term view of operational development then becomes an outstanding opportunity to squeeze more from your supply chain and move your business forward.
In our continuing series of case studies spotlighting our services, suppliers and partnership, we focus today on Socket.
Socket is in the business of building brand, by providing managed back office services, operational, and finance function support for consumer brands big and small. Their expertise is applied to products and services in the personal care, spirits, beverage, baby, home, and sporting goods industries, among others, and they allow business owners and their staff to focus on managing growth, rather than more mundane admin duties.
This is how they help the our shared client interests at Capacity LLC.
“Core competencies” is perhaps an overused phrase in management, but the concept highlights one of the key challenges for any business: what tasks have to be done in-house and which can be outsourced?
For many businesses the back office functions don’t count as a core competency. They are business critical, of course – your people need to get paid and your customers need to pay you! – but not necessarily mission critical.
While you can always rcruit your own experts with the skills to manage administrative and behind-the-scenes work, this is an ongoing commitment. It comes with all the training, management, and HR requirements a new employees (or perhaps an entire team) demand. Owners of businesses of all shapes and sizes regularly decide against hiring a fully functioning team to manage these back office task, leaving them to fill a gap with third-party expertise.
The fundamental action of the Socket team and system is plugging seamlessly into our client’s team workflows to empower them, rather than disrupt.
Established over the course of serving hundreds of companies over 15 years in the business, Socket has learned exactly how to align with diverse clients and the different ways they work. Having flexible systems of work allows the company to customize solutions to the needs of individual clients, meaning there will always be a way for them to integrate what you need to be done with the solutions they have to achieve it.
At the core of Socket’s solution is the simple phrase “turnkey solution.” As the name suggests, the company acts fast to allow clients to plug into their solutions and get the back office busy work out of the door and into the hands of experienced brand builders.
The results of our clients engaging Socket’s servics are remarkably similar to those of hiring a 3PL like Capacity LLC.
We wrote earlier this year about deciding whether or not to outsource services, with the principal benefits being increased efficiency and waste reduction leading to lower costs. Consider the following results that our clients report after working with Socket:
Reduced overhead cost and operating expenses,
Improved efficiency and risk reduction,
Access to specialist knowledge, skills, and relationships that would otherwise be the realm of international companies,
Unrivaled experience leading to expert, scalable solutions.
In summary, it’s important to know what you do well, what’s fundamental to your business, and what you can afford to farm out to third parties who have their own expertise in a field that you don’t really want to manage.
Socket provides an answer in a wide variety of these fields, when your business leaders ask “should we be managing this?”
Whether it’s back office management, payroll and finance, or HR functions, the Socket answer is “no, let us!”
If that’s an answer you’d like to hear for your business, we highly recommend contacting Matt or Scott at Socket today.