Paying close attention to the supply chain is THE key to a successful small to medium-sized enterprise, and entrepreneurs who shift their focus away from this challenge do so at their peril. In this article, we focus on three smart ways to better your supply chain.
Three Supply Chain Tips for SMEs: Forecast, Digitise, Befriend
If you’re seeking to enhance the performance of your small to medium-sized enterprise —and which entrepreneur isn’t?—you would do well to focus on three key aspects of your supply chain: sales forecasts, digitisation, and buttering up your suppliers.
Sound advice, so the joke goes, is usually 90 percent sound and only 10 percent advice. The following three supply chain tips, however, are guaranteed, 100 percent ‘sound advice’ and, if acted upon, could radically improve your business performance.
TIP #1: Focus on Sales Forecasts to Obtain Smart Data
Sales forecasting is the nerve centre of your supply chain. Get it right and your suppliers, your customers, and, hopefully, even you, will enjoy high levels of satisfaction. Get it wrong and you could end up with redundant inventory, which will erode your revenues—and your confidence; or, at the other end of the scale, too little stock, which would leave you unable to meet the demands of your increasingly-irate customers.
The answer: analyse, analyse, and keep analysing. This is imperative. There is no short-cut. Analyse every segment of your supply chain. Analyse your historical sales data. Analyse the pricing of similar products by your competitors. Analyse market response to your own pricing.
Use this ‘smart data’ to give you a clear picture of actual volumes required, and to make accurate assessments of schedules, marketing patterns, and pricing. Remember, anticipating customers’ needs is vital if you wish to affect savings where it matters the most.
TIP #2: Digitise Your Supply Chain
You might struggle to follow tip #1 if you are still operating your global supply chain via email, spreadsheets, and a paper trail. Documents get lost, emails wrongly directed or accidentally deleted, and spreadsheets are notoriously replete with human errors. You HAVE to digitise !
Of course, as a small business, there is no way you can match the big transnational corporations as they race to digitise their entire supply chains using new technological paradigms such as the Internet of Things, blockchain, big data, machine learning, and artificial intelligence.
However, you could consider embracing cloud-based systems , like Software as a Service (SaaS), which would give you access to IT specialists without having to hire your own team of experts. Using an external supplier with a cloud management system would also allow you to re-deploy some staff and thus affect significant savings in the longer term.
SaaS: The SMEs Best Friend in Technology?
While on the topic of SaaS, let’s take a closer look at some of its benefits for your small to medium-sized enterprise:
- You rent the use of an app designed specifically for your company, and members of your supply chain simply connect to it over the Internet.
- The infrastructure, app software and app data are housed in the service provider’s cloud.
- The service provider manages the software and hardware.
- Because data is stored in the cloud, it can be accessed from anywhere and on any device connected to the Internet.
- SaaS offers sophisticated applications, such as Customer Relations Management (CRM) and Enterprise Resource Planning (ERP), at affordable prices to smaller organisations lacking resources to buy and manage the infrastructure and software themselves.
By going to the effort of digitising your ‘smart data’, you will already be well on your way to charting a new, more efficient, and cost-effective course for your SME—yet there is one other vital component, which, if neglected, could undo all of your hard work.
TIP #3: Build Good Relations with Your Suppliers
It is important for SMEs to devote as much attention to the supply side of the business as to the sales side. Be sure to pay your suppliers on time and get to know their sales reps and key staff on a personal basis.
Suppliers typically have an abundance of clients and, on occasions when demand exceeds their supplies, they are sure to look after their valued customers first.
You can’t afford to be last in the queue, so it doesn’t hurt to butter up your suppliers (especially your most crucial ones) and stay on their good side. At the same time, you shouldn’t be afraid to demonstrate fortitude and address issues of concern as they arise—and be prepared to reconsider and renegotiate contractual terms of trade with suppliers from time to time.
Finally, you may be surprised to learn that your vendors often know more about your supply chain than you do. Tap into their knowledge and experience to gain an alternative perspective on your business paradigm.
Forecasts, Relationships, and Digitisation: 3 Keys for a Better Supply Chain
So there you have it! If you want to improve the performance of your business, take a good look at your supply chain.
Take every opportunity to digitise, get smart with forecasting and data analysis, and get on the right side of your suppliers… That’s not necessarily all there is to it, but focusing on those areas will certainly generate benefits and improvement opportunities
If you would like to explore these three key supply chain tips in greater depth, contact Dawson Consulting. We’ll be pleased to offer our professional guidance, and even work with you to improve your forecasting, strengthen supplier relationships, or begin a process of digital transformation.