Things You Need To Know About When Starting Business In The Supply Chain Industry
Supply chain management is not for the faint of heart. It’s a fast-paced industry that demands professionals be on their toes. It is said that plenty of businesses close down within five years from their launch, and the biggest reason behind that is poor supply chain management.
A missed deadline, slipups in procuring products, and sending shipments to the wrong addresses – these contribute to a business’s failure. Likewise, when proper attention is paid to the supply chain management area, companies can grow and thrive. It can generate up to 90% of a business’s revenue if done right!
It doesn’t matter if you’re an entrepreneur who is just starting out or a CEO of a company who has just been winging it so far. Here are some things you should know about supply chain management that will take your game to the next level.
It’s A Competitive Industry
We’re not kidding. Businesses are already employing automation into their supply chain management practices. If you’re new to the industry, get ready to learn and adapt to roles you never thought you’d take on. Teams and customers are demanding, and brands starting out often overlook it. When brands are competing in the same niche, the one who wins in the end has a clear and well-implemented supply chain management strategy.
But don’t get scared. Logistics teams are the friendliest people to work with, and when you’re easing into your role, you will be taught the basics.
Networking Is Key
This is golden advice for beginners, but it’s often not just your skills but who you know that is key. The path to growing your business lies in interacting with suppliers and forging valuable relationships. When you run into problems on the supply chain level, you can fall back on them.
Additionally, try to find a mentor in the industry who has navigated the industry niche you’re in. You may have a new idea, but you won’t go very far if you don’t know how to implement it long-term.
Master The Fundamentals
Before you start up your business, it is important you do your homework. Spend a couple of hours learning about your sources of funding and investments. What market will you be targeting, and who will you be catering your products and services to?
A big challenge in supply chain management is finding reliable people to work with you. We’re talking about drivers and those involved in transportation and logistics. You should be formulating your business plan with your employees and new hire’s in mind. Your hire’s should know the importance of your product and getting it delivered on time.
An intensive supply chain management diploma or degree course will equip you with these fundamentals, but if you don’t have that time to invest in, find someone who does or consult a mentor.
Use Supply Chain Management Software
Supply chain management software is the Best freight broker TMS which creates a well-defined logistics workflow for your business and helps you get organized. You don’t want to run into problems such as suddenly running out of inventory or being informed last minute that your suppliers have been delayed.
A warehouse management software program will even take care of your dispatch process. We’ve mentioned using automation before, and this is a feature that’s included with the best industry-standard programs.
Add GPS Tracking For Deliveries
There’s nothing more frustrating than getting a report from a customer who says their shipments were lost or went missing. An angry client can cost your business millions through just a simple negative review. To prevent this, we suggest using software and devices to track vehicles.
High-quality vehicle GPS tracking will help you optimize your spending budget on dispatches and give you real-time insights about your deliveries. You’ll get notifications instantly on what’s up, and if something goes wrong, you can act immediately and prevent any mishaps.
Overall, it means providing better customer experience and growing your business organically.
Have A Backup Plan
Think of the worst-case scenario that could happen for your business. Your supplier goes off the radar, your shipments are delayed, and your customers are constantly ringing your office phones. Or in another instance, your drivers are facing troubles, so you need to have measures in place that are keeping drivers safe. There also might be instances of truck theft, and you need to have a backup plan or a response ready for such scenarios that arise.
A great tip from veteran entrepreneurs is to connect with multiple suppliers for dispatching a single product. Do this for your entire inventory, and just in case stuff happens, you can rely on the others.
Don’t Penalize Your Suppliers
Don’t penalize your existing suppliers for honest mistakes. Build relationships based on mutual trust, and you will go very far ahead. For instance, if your supplier gets the product dimensions wrong by accident, don’t get mad at them. Chances are, they’ll fix it when they realize it and make sure it never happens. Your suppliers are human, and just like humans, they will make mistakes.
Also, negotiate the pricing for your contracts. If they are experienced in the industry, they will know what they’re signing up for and what the future may hold as your business grows. If they believe in your vision, they will stay invested and work with you. So give them pricing that’s right for their services.
Use Forecasting Systems
If you’re shipping overseas, you want to be able to predict industry trends and minimize the idle time for dispatches. Forecasting systems will give you a thorough analysis of the state of affairs in different countries and help you plan out your inventory haul.
These systems will create backlogs and make predictions for your inventory requirements by using smart algorithms. In short, you know what you will be working with when expanding your business and not dive into matters cluelessly.
Successful supply chain management for businesses involves carefully planning, investing, and implementing action plans that work. It’s not easy and takes groundwork, but it’s possible. Once you optimize your supply chain processes, you’ll see your business take off. It’s your foundation, which is why you want to spend time on it and not end up ignoring it.