Elements of a Successful Supply Chain

At the core of just about every type of business is a supply chain, and as the economy continues becoming more global in nature, it’s more challenging for companies to ensure that their supply chains are operating at peak efficiency.

Maintaining a high level of efficiency is particularly important in tech, given the industry’s complexity and the large number of partners and vendors in tech supply chains.

Robert Johnson, the CFO and COO of New York-based IT solutions provider Future Tech Enterprise, Inc. (Future Tech) has been on the front lines of his company’s supply chain management for nearly two decades, and he recognizes its importance in Future Tech’s success.

“At any time, we hold more than $15 million worth of inventory for our client base,” Mr. Johnson says. “On any given day, we ship nearly 1,000 products, from laptops and desktops to large LCDs and high-end servers.”

Future Tech has built its approach to supply chain management over many years, and the company’s evolved philosophy is central to its success.

Many of its customers are in highly sensitive industries, such as government contractors, defense, aviation and healthcare. As a result, the company has established a demanding set of supply chain standards that are consistent with—and influenced by—some of the world’s largest enterprise.

For example, Mr. Johnson is proud to point out that Future Tech is one of the very few IT solutions providers to have ISO 9001: 2015 certification. Created by the International Organization for Standardization (ISO), ISO 9001:2015 is the most updated international standard focused on quality management systems and performance.

Given this level of expertise, I asked Mr. Johnson to provide key tips for supply chain efficiency. He highlights six of them below.

• Establish policy and partner alignment: Create a comprehensive set of guidelines that apply to you as well as your supply chain partners. Each of them should sign an agreement to follow these protocols or demonstrate that their own policies are aligned with yours. This ensures a clear understanding of expectations. It also helps provide necessary backup if any future issues arise.

• Build the right culture: Efficient operations require a strong culture within your own walls. “We work hard to make sure culture helps drive our supply chain,” Mr. Johnson says. “A big part of our success, I believe, is our focus on maintaining an open-door policy. Anyone in the company can feel comfortable discussing ideas and issues with senior leaders at any time. This approach provides everyone in the organization with a sense of ownership.”

• Audit every step: Auditing every step of the supply chain—including the OEM—is critical. It’s particularly important in tech, given the potential for counterfeit products to make their way into the supply chain. “We make sure we are able to track every product from cradle to grave,” Mr. Johnson notes.

• Third-Party Validation: Establish your own audit policies and conduct internal audits, but also enlist the help of outside support for quality-control reviews. Keep up with important certifications, such as ISO 9001. An outside auditor can help identify issues your internal controls may have missed and/or provide best-practice suggestions that might be better than your current approach.

• Fight Complacency: Auditing is a constant, ongoing process rather than a singular exercise. “Quality management is not static; it’s always improving,” says Mr. Johnson. “The market is constantly changing, so we’re very proactive in adjusting our policies when needed.” Focusing on the continual improvement of the supply chain will keep any company well positioned to be competitive today and into the future.

• Be Willing to Walk Away: If a vendor partner has proven to be unwilling or unable to conform to your policies, you must make a change. Eliminating a non-compliant vendor from your chain can have benefits as well. The partners you continue to work with will be grateful, because your success impacts theirs, and it validates their own commitment to efficiency. Your internal team members will also recognize that you will stand up to support them.

“Today, companies are looking for business partners to meet increasingly stringent standards of quality, safety, and efficiency,” Mr. Johnson says. “So, as logistics and supply chain complexities continue to mount, we have found that our investments in quality control are certainly worth the time, effort and costs.”