If you’re a small business owner, you know that supply chain issues can be a problem. Whether you’re a one-man operation or have a handful of employees, if your supply chain is disrupted it can affect all areas of your business. When you’re a small business, it can be tough to compete with the big guys. Larger scale companies have more resources and manpower to throw at problems. But, even small businesses can have effective solutions to combat supply chain issues.
Why are so many businesses experiencing supply chain issues? In this era of sophisticated technology and two-day shipping, it feels unfamiliar to be waiting for items on backorder. What we’re experiencing in 2022 are some of the effects of the global pandemic; labor shortages, panic-buying, and the economic downturn have created issues that make material procurement less straightforward than we’re used to.
No matter what’s going on in the world, there are steps small businesses can take to be better prepared for supply chain disruptions.
Be Proactive, Not Reactive
Do you have management software that lets you know exactly what you have in stock? If not, you’re already behind. It’s important to be proactive to avoid running into supply and demand issues with your business. If you wait until there’s a problem getting your hands on products, it’s already too late.
Being proactive means you’re prepared to handle worst-case scenarios before they arise. As soon as the alarm is sounded, you know what steps to take to adapt and keep customers informed.
Ways to Proactively Combat Supply Chain Issues
Going digital is one of the best ways to stay on top of your inventory. Enhancing your record-keeping and using real-time analytics are just a couple of ways you can always be aware of what you have, and what you’re waiting on. Here are suggestions for keeping your small business ready to handle hiccups in the supply chain.
Increase Buffer Stock
Instead of operating with limited stock, it’s time to increase your inventory so you have a buffer in the event your next shipment is delayed.
Find Additional Suppliers
You may want to maintain a relationship with your current vendors while still exploring other options for sourcing your products or materials. Having access to secondary suppliers can make or break a small business.
Rely on AI
Does your current AI let you know the trends for your products? You should be able to rely on your AI to predict demand and the potential for shortages based on the logistics for procurement and fulfillment. If your current inventory management software isn’t keeping track of inventory in real time, it’s time to upgrade. This information can be invaluable in the event of a supply chain disruption, as it will allow you to quickly adjust your production schedule accordingly.
Do Your Research
You can also stay ahead of potential supply chain disruptions by staying abreast of industry news. If there’s a storm brewing in China, whether literal or figurative, keep tabs on the situation so that you can make alternate arrangements if necessary. By being aware of potential risks, you can take steps to avoid them altogether.
Sequoia Group, a leader in warehouse management services, also suggests that businesses maintain a mindset that there’s always more to learn when it comes to understanding supply and demand. Companies that can adapt and communicate with both vendors and customers are more likely to come up with successful solutions.
When you’re working with suppliers, it’s important to remember you’re not just buying goods or services from them– you’re entering into a partnership that needs to be nurtured. Ensure that your relationships with vendors are built on trust and mutual respect. They’re experiencing supply and demand issues just like you are, and potentially on a larger scale.
If you treat suppliers as nothing more than a transaction, you can face problems down the line. How do you treat your customers when you’re unable to fulfill their demands? More than likely, you communicate with them and validate their concerns. You do what you can to continue to nurture the relationship even in times of disruption. If you want your suppliers to treat you similarly, practice being a good customer yourself. Keep the lines of communication open and remember that they’re facing some of the same problems as your own business.
Have a Backup Plan
Sometimes even the most proactive planning falls short. So, be sure you have a backup plan in place when things get dicey. It might mean getting creative with distribution; instead of relying on trucks, you might rely on aircraft to get products from point A to point B.
Alternate Shipping Options
Did you know that for many pilots, a corporate job is their preference? It means working with a more limited clientele, delivering goods or people on both domestic and international trips. FLT Academy, a top-rated flight school in Utah, identifies corporate pilot positions as one of the most coveted in the industry. Perhaps they could be an option when it comes to getting your products to you, and to your customers.
When it comes to shipping backup plans, what else have you considered? According to The Balance, the following are the best shipping options for small businesses in 2022:
- United States Postal Service (best overall)
- Sendle (small packages)
- UPS (large packages)
- DHL Express (international)
- ShipBob (eCommerce)
- FedEx (fastest)
- EasyPost (the most affordable)
If you’re not already using one of these services, consider researching them to see if one could be an upgrade from your current method.
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Business Interruption Insurance
Do you have insurance to help cover physical damages or loss of income? Business Interruption insurance can usually be applied to the following:
- Employee Wages
- Loan Payments
- Relocation Costs
- Rent or Lease Payments
If supply chain issues disrupt your revenue stream, having insurance to keep you afloat can be crucial, especially as a small business.
Supply chain issues can be a big problem for any business, but there are ways to combat them. By being proactive, staying organized, and being flexible, you can keep your business running smoothly even when the unexpected happens.