Where Do We Go From Here? Tactics for SMB Supply Chain Survival
In order to offset some of these challenges and compete aggressively with larger companies, SMBs must implement effective tactics to establish and operate an efficient supply chain. Success in today's competitive market requires the tactical management of production and delivery practices to meet increasing customer demands for quality and low prices. This is especially true for SMBs because, by nature, they encompass a large spectrum of duties while dealing with the strains on their infrastructure resulting from their high rate of growth. SMBs must acquire new technology to devise an integrated approach to managing their entire business, including inventory, logistics, distribution and sales.
Overseeing relationships with suppliers and customers, controlling inventory, and forecasting demand are the central components of managing an efficient supply chain. Improving performance within these three elements builds a stronger, integrated and coordinated supply chain, improving productivity and providing SMBs with a competitive advantage over larger companies.
Overseeing Relationships with Suppliers & Customers
The relationship SMBs have with their suppliers is imperative to the effectiveness of their supply chain and their business. It is important to develop a set of pricing, delivery and payment processes that are aligned closely with the company's goals. To gain a competitive advantage, SMBs must invest in technology that will manage the inventory of goods received from the supplier. Many business management software packages automate the entire supply chain by regulating shipments, verifying them, transferring them to manufacturing facilities and authorizing supplier payments all in one system. Business management technology gives SMBs an advantage by automating the flow of information between departments and reducing mistakes associated with the double-entry of information across discrete systems, thus creating a more efficient supply chain.
One of the central motives in creating an efficient supply chain is to reduce costs; however, another objective of successful supply chain management is to meet customer requirements and needs. Today's customers expect the same experience whether they are dealing with an SMB or a large company. The Internet has made customers less patient and forgiving about problems with transactions, deliveries, orders and customer service. It is crucial for SMBs to maintain a synchronized, efficient supply chain to provide higher product quality and improved customer responsiveness. Business management software allows SMBs to better serve their customers by having instant access to information regarding their order, status of shipping and payment information. Business management software provides SMBs with real-time information, which reduces response time to customers, and ensures faster order fulfillment and extended service.
Another important element in establishing a more successful supply chain is controlling inventory. In order to compete with larger companies, SMBs must be able to reduce inventory costs and optimize stock levels to ensure an efficient flow of their supply chain. Investing in business management software can help SMBs eliminate manual inventory management as well as serialize their entire inventory to track individual items by supplier, price and age. Business management software also improves warehouse operations to optimum levels of efficiency by enabling SMBs to track and control inventoried items to ensure adequate supply is maintained at all times.
To effectively forecast demand, manufacturers and retailers alike are utilizing highly developed techniques to understand how consumer demand should be estimated, planned for and influenced. For SMBs to gain a competitive advantage over larger companies, they must be able to utilize consumer demand information to drive the efficiency and performance of their supply chain.