How Do I Optimize The Supply Chain Of My Small business

How do I optimise the supply chain of my small business?

Businesses that plan to stand out from the competition understand that growth rests on the efficiency of their supply chain. As a small business owner, it’s easy to look at supply chain optimization as a sophisticated concern for only big companies.  This is far from the truth as it is equally important for the growth of your business and especially for business owners who are looking to scale their business someday. Now that your business is still experiencing growing pains, it’s wise to start thinking about your supply chain system and identify the gaps you need to close to avoid being caught unaware.

5 things to keep in mind to build the supply chain of your small business 

In a Global Supply Chain Survey led by Deloitte, they analysed what a distinctive supply chain looked like in practice by measuring the responses provided by company executives based on the following supply chain performance metrics: (1) inventory turnover and (2) the percentage of deliveries that are on time and in full. It was discovered that 79% of companies rated by their executives as significantly above average also experienced above-average revenue growth. Meanwhile, only 8% of the companies that fell below the average of the supply chain performance metrics experienced equal success. 

A business owner who wants to reap the fruits of an optimal supply chain needs to ensure that the following things are in place:

• Execution

 A hands-on approach is valuable, requiring intimate knowledge of your business objectives and strategies. Beyond participation and optimal engagement, a business owner must ensure that everyone in the organisation understands the common goal and are committed to seeing it to a good end. Adopt technology and take advantage of analytic tools that meet your needs to understand the data. This will guide your execution strategy and ensure you not only hit the mark but also know when you’ve missed the shot and need to take a step back to evaluate because everything communicates.

• Adopt customer-centric initiatives

Your customer service strategy is not something to leave for later. From the beginning of your business, the goal should be to understand demand and customer needs and position yourself to meet those needs. Try to meet customer service objectives - get it to the customer when the customer wants it and at the price the customer gets value for money spent.

• Smart delegation or collaboration

It’s important that small businesses do not overwhelm themselves when starting.

Streamline your services and focus on key strengths. In the long run, it’s both cost and time-efficient to outsource add-ons as much as you can. The primary thing is to ensure you provide quality products and also maintain that standard quality in your offering

• Cost-efficient goods and services

Keeping in mind that the cost of raw materials can affect the final prices offered to the customer, you need to build your negotiation skills to get the best value for money. Don’t depend on just one supplier, have various sourcing options and build relationships with them as it would aid your growth. Look out for the hidden cost of inefficiencies that may impact

overall costs and close the gap.

• Simplify processes

From the beginning, strive to build a lean and agile operation. This trait will help you when your business scales, make the most of the limited resources you have and avoid waste. In building an efficient supply chain, adopting the Kaizen principle of continuous improvement amongst others is a mindset that will take you a long way. 

References

1. Deloitte: Supply Chain Leadership Distinctive Approaches to Innovation, Collaboration, and Talent Alignment.
2. SearchERP: Kaizen (Continuous Improvement).