5 SUPPLY CHAIN PRACTICES FOR SMALL BUSINESSES

Managing production and distribution in a small business takes time and effort. Managing the supply chain requires lots of experience to procure the right goods at the right price, at the right time, and at the right place.

5 SUPPLY CHAIN PRACTICES FOR SMALL BUSINESSES

Here are 5 supply chain practices for small businesses that every business must consider to increase the efficiency of performing supply chain tasks.

• Market analysis

Before procuring and producing goods, it is essential that you perform a market analysis of your products. Market analysis includes estimating the demand for the product in the near future and considering external factors such as economic, political, social, and environmental impacts. A proper study of the key competitors is also crucial for market analysis.

• Choose the best supplier.

Once you finish the market analysis, choosing the supplier that meets your requirements is essential. Many factors need to be considered when selecting the best supplier, such as the supplier's capacity, costs offered, background checks, financial stability, credit allowance, etc. All these factors must be given equal weightage to determine the appropriate supplier. Moreover, flexible arrangements with suppliers help in the smooth flow of business operations. 

• Consider the cost

After evaluating the pool of suppliers on various factors, you can shortlist one or two suppliers. At this point, you need to carefully consider and calculate the costs offered by the shortlisted suppliers. Apart from the price of the goods, the cost will also include a portion of funds to be kept aside for contingencies.

• Evaluate the supplier's performance.

A constant evaluation of performance helps avoid all sorts of procurement problems. It helps in understanding discrepancies and formulating policies for the future. Evaluation is a mandatory task that every organization, regardless of size, must perform to analyze performance and make corrective action plans.

• Outsourcing

For small businesses, managing the supply chain is a complex endeavour that demands significant time, financial investment, and specialized expertise. In such a situation, a firm can opt to outsource the supply chain practices. Many organizations help perform supply chain management in return for a reasonable fee.

Effective supply chain management is quintessential for an organization's success. To ensure the smooth functioning of the business, the manager must constantly analyze, identify, and remove barriers to avoid future complications.