One of the great difficulties that any small business encounters is supply chain management.
The system (known as the acronym SCM), implies a great responsibility for the success of the company. By managing it well, the flow of goods and services that lead to a satisfied customer will be under control.
By making constant improvements to SCM, your business can gain a competitive advantage over your competitors because you’ll provide faster, more accurate deliveries to distributors and direct consumers. Not only will you improve customer satisfaction, but you’ll also have tighter control over your money management and profit margins thanks to better routing and efficient stocking.
Not many people know about the nitty gritty details behind SCM operations, so below are five improvements you should consider – they’re sure to have a positive impact on any small business.
- Who is responsible for the supply chain?
Clearly establishing which people are responsible for the strategy, efficiency, and functionality of the supply chain will make planning for the future – and managing the present – much smoother.
Create a dedicated team or choose the most qualified person to improve the SCM. You want someone in charge who pays close attention to detail and finds opportunity for improvement at every corner. What’s sitting on the corner? What’s flying off the shelves? Do you run into overstock or understock issues? Do you receive deliveries on time, or do you send packages delayed?
These are the types of question your SCM lead should consider and sort through to improve the business. Depending on what industry your small business lies in, of course the answers and relationship to supply will vary widely. But early detection and proactive innovation relate all the same.
- Is the team responsible for the SCM well trained?
A common challenge for many small business owners is the fact they don’t receive formal training in SCM and therefore have difficulty seeing the big picture. It’s a complex ebb and flow of goods going from one place, to your company, then typically passed on again to the consumer.
You might be a productive professional, but if you lack the necessary operational training, you’re more than likely to run into failures in the chain.
The more you invest in SCM training, you and your team will experience better results, leading to greater customer satisfaction and higher profit margins.
- Does the business have the best technology?
Has the appropriate payment software been configured to expedite the supply chain? Are inventories managed digitally? What other technological solutions can be implemented to improve the results of small business?
It’s crucial that your business can to adapt to the current digital world, which is always changing and experiences exponential growth. By not doing so there is a big loss: huge competitive advantage over other businesses.
- Is there an appropriate transportation management system?
Another key aspect of the quality of your SCM is having an appropriate transportation management system.
Why? Because this will provide you with extensive knowledge of estimated time of arrivals, deadlines, and possible failures in the chain. If appears as though a delivery might be late – say, for example, because your cargo driver got held up in a winter storm – you’ll be able to notify your customer or merchant ahead of time, assuaging their concerns and making them aware that you are on top of the problem.
By respecting transportation times, taking advantage of the opportunities therein, and working on the weak points when getting products from point A to point B, you’re guaranteed to provide better service. Better service leads to higher sales and, correspondingly, larger profits.
- Are relationships with suppliers maintained?
In SCM, one critical element of success is maintaining a good relationship with suppliers. This means not only cordial treatment, but also respecting the contract and establishing a joint growth plan that benefits all parties.
When you work as partners, each party will feel mutually invested in the success of the other. They’ll want to provide you with satisfied service in order for you to sell, because that means you’ll have greater demand for their supply.
Apply these five improvements to supply chain management for better control of the flowing goods and services your small business offers. If customer satisfaction is guaranteed, success will follow.