Supply chain management 101

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Beyond logistics, supply chain management governs everything that has to happen to get your product from Point A to Point B. Think of it as a complete view and better control over supply chain activities like production, inventory management, planning, transportation and more. Supply Chain Management is critical to the success of any business, large or small. Yet, 69% of companies surveyed say they don’t have full visibility into their supply chains.

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Why is it important?

Once the realm of large corporations, supply chain management is now a must-have for businesses of any size. For example, how big of an impact a cost-effective distributor could have on your business or a supplier that provides a better-quality product.  The good news is that small businesses can react quicker than the big guys, making it simpler to optimize your supply chain processes and reap the many benefits.

 

Benefits include:

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Reduced costs.

By isolating any processes that, for example, pile on expenditures without building value, or use up resources and increase production costs, you’ll achieve better efficiency and a smoother flow.

 

Better relationships.

By building stronger, one-on-one connections with suppliers to ensure on-time fulfillment, you’ll forge better relationships with existing customers, while attracting new ones, as well.

 

Bigger profits.

By cutting costs, developing efficiencies and establishing better relationships with suppliers and customers, you’ve got a formula for success. A closer look at how to start building your supply chain and optimizing it for your small business.

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Supplier and stakeholder relationships 

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• Build partnerships. This one seems fairly straightforward. Find suppliers and stakeholders that bring value to what you do by providing goods, materials and services to your company. They need to be cost-efficient, reliable and easy to work with. Already have established partnerships? Don’t rely on loyalty alone. While an occasional late delivery or cost increase isn’t a make-or-break scenario, make sure they’re performing up to the task, meeting expectations and helping you do right by your customers. If not, it may be time to find another supplier.

• Create security with your relationships. Once you have a good relationship, keep fostering and building on it. This rapport will bring you the security of supply you need, even in times of market instability, extreme weather, environmental risks and more.

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Risk management

Management is critical to the management of any business supply chain. Why? Companies that proactively manage supply chain risk stand ready when supplier disruptions happen, and they inevitably will happen.

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Two things to keep in mind:

• Market intelligence. While larger businesses can use third-party companies to stay “in the know” about what’s going on in their industries, most small businesses don’t have that luxury. Instead, many adopt a DIY process. Marketing intelligence can come in the form of staying up-to-date on the news, searching Google, scanning social media sites, reading trade publications and other homespun approaches. From trade wars and wild weather to material shortages and new regulations, marketing intelligence keeps you informed of things like when it’s safe to grow engagements, when to reduce, and when to hold pace.

• Economic environment and landscape. The supply chain risk environment and landscape continually evolve, with each year bringing new challenges for companies via unexpected events and unpredictable consequences. Using market intelligence helps you re-evaluate your risk environment in light of events like product recalls, safety scares, industrial unrest and so forth, so you can stay agile and protect your bottom line.