Supply Chain Management
Supply Chain Management
08 October 2018,
Well-run businesses are balanced and strong in all areas. A great idea, good marketing, and sales skills will go a long way but what happens when your product or service starts to take off? Flaws in your business may be exposed in the form of long lead-times, quality issues, and poor financial performance. Strengthening your supply chain management skills will keep your operations running smoothly.
Supply chain management is all about the inputs you use in your business. However, it is more than just sourcing the materials you need to build your product or deliver your service. Managing a supply chain involves qualifying suppliers, managing their performance, and frequently evaluating your position to make sure you can adjust your strategy quickly if necessary.
Early on when you thought about starting your business, you very quickly realized that you would be relying on other businesses to make your business run. Sometimes you need to make decisions quickly to get your business off the ground, but choosing and qualifying your suppliers should be something that you spend extra time on. When you first think of qualifying a supplier, you probably think “Cool! This company makes the raw material I need for my product”. Maybe you have an idea for making picture frames that the input you need is wood. You may find a company that makes the right color and profile for your frames, but after you begin to qualify them you realize that they are short-staffed and are having delivery problems, or maybe they are not following modern quality standards and the product varies greatly from piece to piece. It is helpful to find multiple suppliers for one input so you can weigh their strengths and weaknesses. Maybe you find that one of the suppliers cannot make the exact input you need, but they offer fast delivery and credit terms that will help your cash flow. This may be a better option than the perfect product!
Once the relationship with your suppliers has been established you begin managing them. Holding them accountable for delivery deadlines is common, but also following quality problems that arise can be important too. Your suppliers have many customers, and sometimes the most persistent person gets their attention. In addition to managing their performance, you should evaluate their performance and make changes as necessary.
Supply chain management is handled differently depending on the person responsible. There are even generational differences in-play. In today’s business climate, Millennials are becoming more involved in critical parts of the business, they may even be starting their own. This generation expects communication to happen differently, questions answered quickly, and enjoy the gratification of finding the best supplier themselves. This generation will eventually reshape supply chain management by taking concepts from the B2C world and applying them to the B2B space. Imagine a rating system that a buyer requests for your industrial product; it is more likely than you think.
Supply chain management is a pillar in any successful business along with the other roles that usually get all of the glory. The decisions you make whether it be the people you hire, products you buy, or processes you implement, will determine how much and how fast you can scale up your business. Get a plan together for supply chain management, and do not hesitate to take your foot off of the gas in other areas to work on it (especially if you are a start-up or small business); the small investment to create a plan will be well rewarded when all of those orders start coming in.