Small Business Logistics: 5 Supply Chain Follies Your Business Needs to Avoid
Great supply chain performance is often the difference between realizing a profit on manufactured products through good vendor relationships and decreased profit margins as inventory sits in storage facilities. Creating supply chain efficiencies takes the team work of trained, skilled supply chain experts who are strategically positioned to give input throughout the product life-cycle. These industry experts may also warn decision makers about common supply chain mistakes like the ones described here.
Misunderstanding the Reason for the Chosen Supply Chain Structure
Seasoned supply chain managers know to tread softly when it comes to responding to supply chain trends and implementing new techniques. They understand that a business unit’s supply chain structure is closely tied to their manufactured product. If the product is a commodity that requires very few variations, then tight streamlined structure is necessary to support profit margins. If the product requires the introduction of frequent variety to maintain a competitive advantage, a more responsive supply chain structure is needed. Misaligned supply chain structures prove fatal to profits in many cases.
Failing to Think Globally
Some small business owners modestly prepare for short-term growth in their domestic environments, but they fail to plan for growth in overseas markets. This type of long-term planning involves establishing processes, policies, and even information systems that scale for a global audience. Being prepared ahead of time for growth will save your company lots of time in the future.
Lack of Transparency for Supply Chain Big Data
Not utilizing business data to aid with decision-making is another mistake. Data items are often available, but it is not in a usable format. This problem is exacerbated by staff members who are untrained in both data analysis techniques and industry standards. Training courses for industry standards like those found at Law Transport allows staff to identify important data elements needed for analysis and sound recommendations.
Believing IT Tools Largely Drive Supply Chain Performance
While it may be easy to give IT tools the credit for increases in supply chain performance, it is trained, talented staff members who know how to use the new tools effectively to create competitive advantage who deserve the credit. These team members are responsible for crafting processes and procedures that help to achieve company strategic goals. Also, updates are carefully reviewed for impacts to performance often using comprehensive modeling and simulation tools.
Ignoring Work Force and Environmental Responsibilities
Quick tactical maneuvers and short cuts that ignore the social responsibility that most companies now view as the norm only produce short-term gains. Many companies have learned the hard way how important this is to their business. Mistakes in this area tarnish years of good brand building activities.
Smart company decision makers do not allow their organizations to fall prey to the same management mistakes that plague other businesses. Paying attention to what constitutes great supply chain performance for companies within given industries allows business managers and decision makers to effectively exploit the lessons learned from their competitors.