How to Fix Small Business Supply Chain Issues

How to Fix Small Business Supply Chain Issues


It is always dreadful to think about the delay in delivering essential goods in running your organization. If you do not have any contingencies, this nightmare quickly becomes a reality at some point. During The recent pandemic, the disruption of global supply chains resulted in shipment delays halting the operations of many organizations. The turmoil in global supply chains brought home the point that an organization must have a supply chain resilient to domestic and international shocks. While you cannot control the supply chain, you can implement different measures to safeguard your organization’s operations against the aftermath of disruptions in the supply chain. The tips below will prove helpful when faced with difficult times in the future.

Invest in technology

Investments made in technology are pretty cheap in comparison to the sales lost due to inventory shortages. An organization ought to invest in a digital network that is up-to-date and secure. This network holds an ultramodern inventory management system linking you to our sales organizations, warehouses, production facilities, and suppliers, thus providing integrated information from producers, suppliers, sales, and customers.

An inventory management software is essential for your organization because it delivers live and detailed access into the supply chain management and control of the inventory through the feedback of supplier on-time performance, stock on order, and inventory levels. An inventory management software enables your organization to have up-to-date knowledge of the suppliers’ raw material levels and your vendors’ inventory levels and, therefore, to assist you to steer clear of supply chain volatility.

Diversification of Partners and Suppliers

In business, it is always prudent to hedge your bets. Reliance on a single supplier for a critical component or product is suicidal for your operations. It would be best not to depend on the stability of political, social, and environmental factors when analyzing your supply chain. For reference, the recent economic and political issues between the United States and China led to supply disruptions for some organizations. Large manufacturers had to utilize numerous suppliers, even at marginally higher costs, to prevent customers and business loss due to potential supply chain disruptions.

Integrate Risk Management into Your Supply Chain

You should establish a supply chain risk model that enables the evaluation of the likelihood of the disruption of the supply chain and utilize the model to monitor and prevent risks. Supply chain management encompasses raw materials sourcing, the flow of goods and services end-to-end, and the transformation of raw materials into finished products. It also contains actively smoothening the supply side operations of an organization to optimize customer value and attain competitive advantage. One way to avoid disruptions is to have an external facility where goods and services are produced and stored as compared to in-house supply chains. Whether you need a concrete warehouse for lease in Houston or a collaborative office space for procurement in Denver, there are professionals to help you regardless of what your situation is. It is essential to know where disruptions in the supply chain can occur, impacting a product’s availability, pricing, and quality.

Develop a Comprehensive Purchasing System

You should move away from manual purchasing systems based on paper to cheaper automated purchasing systems, afford you more control, and connect you to all critical functions in your organization. It is unfortunate that many small businesses still depend on manual processes and Excel spreadsheets. A comprehensive purchasing system that is procure-to-pay solves the issues of integration and automates the purchasing system. Procure-to-pay refers to a cycle of business processes and covers the procurement roles for the services and goods required, the procedures for receiving, the account payable, and the functions of accounting. Furthermore, payable duties incorporated in procure-to-pay encompass matching the vendor’s invoice to the orders for purchase and receiving reports, attaining approvals for an invoice, paying the invoices accepted, documenting transactions, and producing reports.

Focus on Money

The primary objective of any business is the transformation of inventory into cash. It would be best to consistently execute actions that hasten the collection of money from the organization’s clients. When analyzing the supply chain of your organization, consider it with cash flow as a significant factor. When analyzing the supply chain, cash flow forecasting is an essential element. It provides you with an indication of how long your organization will remain operational with supply chain disruptions. Cash forecasting will help to ensure that you have enough inventory to weather disruptions in domestic and global supply chains. Thus, cash forecasting allows you to plan, ensuring that you remain operational and do not lose customers in an important market.

While domestic and global supply chains are uncontrollable, you can implement different measures to safeguard your organization’s operations against the aftermath of disruptions in the supply chain. After all, business success depends on the mastery of what you can control instead of worrying about what you cannot control. Thus, it is essential to fine-tune your supply chain to ensure it is sturdy to supply chain volatility.


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