Supply chain management is complex and things aren’t getting much simpler in 2023.
The pandemic presented businesses of all sizes worldwide with supply chain issues that have persisted years after lockdowns began. For example, around 30% of retail, wholesale, and manufacturing companies have been affected by supply chain disruption since COVID struck.
Other issues, like increased energy costs, Brexit, and the volatile situation in Ukraine, have hurt supply chains, too.
As a result, companies may find it more difficult to source the correct quantities of materials and products to meet demand. That could lead to under- or overstocking, panic ordering, wastage, and an eventual drop in revenue.
SMBs need to take a creative approach to deal with these challenges, but what does that mean?
In this post, we’ll explore four fantastic supply chain strategies to help you make essential improvements.
4 supply chain strategies for SMBs
Nearshoring or reshoring
Companies can try returning their supply chains to local territories to mitigate supply chain problems.
While offshoring has been a popular strategy for many businesses worldwide, disruptions related to the pandemic and Brexit have demonstrated its vulnerability. But nearshoring and reshoring can facilitate smoother, more efficient, and more reliable supply chain management.
Nearshoring refers to one business working with another in a nearby country, while reshoring involves bringing production back to a company’s country of origin. The latter strategy has gathered momentum recently — more than 75% of UK businesses have started to work with more British suppliers since 2020.
Companies that reshore can reduce their risk of supply chain disruptions caused by problems in other countries. They can keep their operations running smoothly and provide customers with a more efficient, dependable service.
Check out our blog post to learn more about reshoring manufacturing.
Cultivate strong relationships with suppliers
Building and maintaining positive relationships with suppliers is vital. That’s where effective supplier relationship management (SRM) comes in.
SRM aims to identify which suppliers offer the most value to your SMB and cultivate a solid relationship with them. Assess suppliers’ role in your supply chain and consider how your operations would be affected if something went wrong with one of your suppliers.
Would you face production delays? Or can you find a replacement quickly and avoid serious disruptions?
Risk is another important factor to consider. Various issues can hinder a supplier’s ability to deliver the goods you need on time. These include:
- Problems with shipping to or from their location
- Political/cultural/natural disruptions that impact operations
- A drop in quality
- Inability to comply with regulations
- Unethical treatment of workers, the environment, or animals
You need to understand how your suppliers work, what risks their location and processes pose, and whether you could find a safer alternative.
When you identify your most important suppliers, think about how you can maintain your current relationship and the level of value that your SMB provides in return. Make sure it’s in their best interest to keep working with you, too!
Stay agile and flexible
Businesses implementing agile processes will be more able to shift gears when disasters strike. An agile company should have the flexibility to:
- Adapt to changes affecting their industry
- React to customers’ evolving needs and adjust their products/services
- Embrace new technologies and techniques to increase productivity
- Identify operational issues and create improvements
Adopting an agile approach may involve:
- Using real-time inventory data to track stock levels and reduce waste
- Staying open to working with new suppliers, seizing opportunities, and trying new processes
- Using demand forecasting — analysing historical data to predict future demand levels for a particular product or service
- Diversifying your supply chain by working with different suppliers which can reduce lead times and mitigate sourcing risks
- Defining issues that may affect your supply chain and identify ways to avoid them
- Empowering employees to deal with any problems that arise and formulate ways to solve them
- Simplifying processes to increase productivity and facilitate stronger communication with suppliers and customers
Switching to an agile structure may seem daunting. But investing time and resources can pay off by building stronger supply chain management. That’s why this solid business strategy might be just what you need.
Learn more about the benefits of taking an agile approach in our post about agile warehouse management for food and drink brands.
Use technology to improve processes
Finding ways to streamline internal processes is a must for SMBs concerned about supply chain issues. Companies can help mitigate supply chain disruptions or delays by creating smooth internal processes.
SMBs have more technology to choose from than ever, including:
Artificial Intelligence is great for automating and completing tasks quickly. It also frees up time for human employees to focus on more complex tasks that AI can’t handle or ones that need a more personal touch.
Machine Learning helps the tools you use identify issues that may lead to supply chain problems down the line. It can also predict demand accurately and provide you with the information to make essential changes.
SMBs can use the latest 3D printing technologies to produce various components and goods locally. As a result, they can decrease their dependence on outsourced solutions.
Cloud-based order and inventory management software
Order and inventory management software is a simple, effective way to streamline order and inventory management. It can help you manage all of your inventory and orders in one central place and help you eliminate manual processes and re-entering data.
Implementing these and other valuable technologies into your business strategies can improve your supply chain management. Combined, they can help you predict demand, automate processes, make positive decisions driven by data analysis, and more.
Using cloud-based order and inventory management software for improved supply chain strategies
Workhorse helps businesses save time, increase efficiency, access key data, and take advantage of cutting-edge automation.
Our cloud-based order and inventory management solution gives you better visibility through a centralised dashboard. Get everything you need to manage orders and inventory in one place. And Workhorse is fully configurable, meaning you can create the perfect solution for your SMB with all the features you need and none you don’t.
Book a demo or start your free trial to see Workhorse in action!