Small businesses tackle a range of challenges on a day-to-day basis, from competing against major companies for market share to managing finances and cash flow.
However, one of the most significant issues many SMBs face, particularly in the ecommerce and online retail sector, is managing and optimizing the supply chain.
While it may seem that only the biggest companies struggle when supply chain problems strike, smaller companies also face the same issues. What’s more, when supply chain problems do emerge, small businesses often lack the infrastructure, funds, and expertise required to bounce back quickly.
As problems with supply chains continue to evolve in a post-pandemic world, such as the potential strike of UPS employees, it’s more important than ever for smaller companies to ensure they have the right strategies in place.
Here are some ways SMBs and other smaller brands can improve the resiliency and performance of their supply chains.
1. Use Intelligent Inventory and Demand Forecasting
Optimizing and enhancing the supply chain requires a “proactive” approach from small business owners. The easiest way to minimize inventory problems, such as over and understocking, is to learn how to forecast demand more effectively. Estimating future customer demand for specific products and ordering inventory accordingly helps smaller companies better prepare for changing trends.
Fortunately, today’s companies don’t necessarily need to spend hours sorting through data to make these evaluations. Advanced analytical tools and AI-driven solutions can help online sellers detect trends and patterns quickly and effectively.
Tools like Peak can gather and assess information from a wide range of sources, providing overviews into purchasing opportunities, inventory turnover, and seasonal trends. This enables business owners to make smarter purchasing decisions and avoid spending money on inventory that may not sell.
2. Find Alternative Suppliers for Crucial Products
Many SMB owners aim to limit the number of suppliers and partners they work with to facilitate business growth, as fewer partners can lead to less work on the back end for time-pressed companies. However, relying too heavily on a single supplier can be problematic in an unpredictable environment. If a supplier is unable to meet your procurement demands during trade blockages, product shortages, and other events, you could miss out on revenue.
Fortunately, finding additional suppliers for crucial products doesn’t have to be complex. There are plenty of online resources available, including directories like Alibaba and DHGate. Finding additional “backup” suppliers can ensure business leaders always have another partner to fall back on when something in their primary supply chain fails.
You may even find extra suppliers who can offer better deals on some of your products, allowing you to cut down on operating costs and expenses.
3. Use Freight Forwarding for International Shipping
As your small business begins to grow, you might discover new opportunities to sell to customers in a range of different geographies and locations. The evolution of the ecommerce world allows even smaller organizations to branch out and connect with a huge audience.
However, serving international buyers means having a strategy in place for international shipping, as the international arena can prove complex and expensive for small businesses. Working with a freight forwarder that specializes in small businesses can be an excellent solution. Ship4wd, for example, works exclusively with SMBs, helping them grow their international presence by securing affordable overseas shipping rates, which are often too expensive for small companies. The digital platform also offers credit lines, workable payment terms, and online checkouts, giving SMBs much-needed flexibility.
Freight forwarders can also help handle the intricacies of customs regulations, taxes, and the various documentation requirements necessary for specific countries, as well as real-time tracking and round-the-clock support.
4. Outsource and Automate Essential Processes
While there are many factors that make supply chain management and optimization more complex for small businesses, lack of access to resources and talent are often a core problem. Many small business owners struggle to manage logistics efficiently with limited resources.
While hiring a wide range of professionals might not be possible on a limited budget, there are other, more cost-effective ways to unlock new opportunities. For instance, outsourcing logistics operations to third-parties can ensure you can leave the complicated tasks in the supply chain to the experts.
There are also software solutions and tools available which assist in automating various tasks, such as customs clearance, managing import and export documentation, and consolidating shipments. Companies can even take advantage of warehouse automation software, such as Qlik Sense, to assist with intelligent business decision making.
5. Stay Informed and Be Transparent with Customers
Finally, preserving good relationships with your customers is crucial to ensuring you make the most of your supply chain strategy.
This starts with making sure you stay informed about the nature of your marketplace and any supply chain disruptions that might occur. Issues with the supply chain can happen at any time. However, in some cases, they can be quite predictable.
Staying current with trends in your industry that affect your products or logistics can give you an insight into when shortages and problems are likely to occur. This means you can take precautions, such as finding alternative products to stock and keeping your customers informed.
Letting your customers know in advance when you’re facing supply chain issues can improve your business reputation and help you retain the loyalty of your clients. While customers will always find delays and longer shipping times frustrating, they’re more likely to be forgiving of companies who keep them up-to-date rather than in the dark.
Be Ready to Overcome Supply Chain Issues
It’s difficult to effectively predict and mitigate all supply chain issues you might encounter as a small business owner. Supply chains can be influenced by everything from major global events (such as a pandemic) to extreme weather conditions.
Failure to prepare for and manage disruptions can lead to significant issues for small business owners. However, there are ways you can protect your business and optimize your supply chain. By following the steps above, you’re better positioning your SMB to capitalize on crucial growth opportunities and maintain long lasting relationships with your customers.
