As you started 2024 you may have set goals to grow your business this year, whether by extending your product range, entering new markets or growing your customer base. However, when growing your business it’s important to remember that your supply chain may need additional attention, as the risk with growing too quickly may mean your supply chain and logistics cannot keep up the pace, leading you into troubled waters.
We’re going to examine our top tips for smooth supply chain management and explore some of the key factors to consider when growing your business.
If recent years have shown us anything, it’s that a risk management plan is essential! From a global pandemic, European War, HGV driver shortages to fuel rises there has been an onslaught of challenges affecting supply chains across the UK. Whether your business is small or large, a risk management plan is vital to identify potential risks that could affect your supply chain such as localised natural disasters, extreme weather, or strike action. Your plan would outline how certain risks could affect your supply chain and the steps you would take if a situation was to occur. Historical disruptions can offer a starting point by analysing what went well or what you could have done better during those times.
Selecting suppliers who are trustworthy, reliable and who offer high standards of quality and service is important to ensure you’re able to then deliver fast and quality service to your customers. Sometimes the cheapest supplier isn’t always the most sensible choice.
Maintaining strong relationships with your suppliers is crucial for a smooth supply chain and gives you more negotiation to better rates and delivery times. It can also help to minimise logistical issues – if your suppliers experience issues sourcing products or parts then you need to know about it so clear lines of communication are vital. Paying your suppliers on time is one of the biggest ways to maintaining good relationships (and will also help you save money on early payment discounts) – have a look at accounts payable (AP) automation which can half the time it takes to pay your suppliers.
As the saying goes “don’t put all your eggs in one basket”. When it comes to supply chain this means making sure you have more than one supplier for your products, especially your key best sellers. Unforeseen issues can arise at any point such as floods or fires which could impact shipment from a supplier so by having others as back-up you will always be prepared and can continue to fulfil customer orders on-time.
Research by Gartner has revealed that only 47% of businesses use Supply Chain Management technology horizontally across their business functions. However, investing in a robust ERP solution, such as Opera 3 SE, and benefiting from the high level of visibility provided, is essential to any business looking to grow. A SCM system allows you to combine your purchasing, stock, sales, and financial management so you know the exact value and location of your stock, how much is needed, the profit margins made and helps you know when to order more.
Use historical sales information to pinpoint when you will need more of a certain product so you can prepare your supplier and improve the overall effectiveness of your supply chain. By planning ahead you can make sure your supply gets products to you in plenty of time so you can meet customer demand and fulfil orders in a timely manner.
If there is one thing you should never cut corners on, it’s quality control. You should check, double check, and check again all incoming stock to ensure it’s of the expected quality because if inventory is not up to scratch then that could be detrimental to your reputation.
Supply chains are busy, and you need all hands-on deck to successfully manage a hectic warehouse and distribution smoothly. Consider your resources and whether you need to hire more help during busy or seasonal periods so you can meet demand.
In busy periods your growth might be held back by insufficient storage in your warehouse or you might be limited by logistics. Third party logistics is a consideration whereby you outsource your storage or logistics to a third party so you can continue to grow your business without being held back by environmental factors.
Just because something works today, doesn’t mean it will work tomorrow so it is vital that you regularly review your processes so you can quickly identify areas where efficiency could be made or identify problems that are occurring. For example, have you noticed that quality is slipping from a particular supplier, or perhaps you’ve noticed an upturn in late shipments? It may be that a bottleneck keeps occurring in the same place within your supply chain process which highlights work to be undertaken.
Any business looking to grow will have to pay additional attention to their supply chain to ensure it can keep up with increased demand and is running efficiently. Choosing your suppliers wisely and maintaining a good relationship with them is vital, as is investing in an ERP solution to give you greater visibility across your entire business. It’s also important to regularly review and plan for unforeseen circumstances to proactively avoid delays or disruptions.
For more information about supply chain management then please get in touch with our friendly team.
Posted On: February 01, 2024
