Your small business might offer products of unparalleled quality, but if your supply chain is less than optimal, there is a good chance you’re missing opportunities to gain customers and make more money.
Whether it’s shipping delays, a lack of inventory, or costs that are higher than expected, supply chain issues can have an impact on your bottom line. The only way to optimize supply chain management is by finding all the problematic areas and addressing them one by one.
Inventory Accuracy Issues
If you go to ship an order for a customer only to find that the items they paid for aren’t actually in your warehouse, you need to improve your inventory accuracy right away. The most effective way of doing this is by implementing periodic physical inventory counts, wherein you count all the items in your inventory and compare them to your records so you can reconcile the differences.
You should also institute cycle counting. This entails counting several essential items each day. If you vary what you count regularly, you can help your inventory remain accurate without too much time or effort. This can also make your yearly physical inventory go a lot more smoothly, as there should be fewer things to reconcile.
It’s important to look beyond markups and determine the true profits of items you sell. The cost of acquiring the item is just the beginning; you also need to factor in the cost of shipping, inspecting, insuring and storing goods, not to mention any potential customs or duties. Reducing the costs of goods by negotiating with suppliers can help you avoid raising prices for customers, which will help you remain competitive.
Issues related to the cost of goods and inventory accuracy are only part of the story. You also need a keen understanding of the lead times involved in your operations, and you must ensure customer deliveries are as efficient as possible. When it comes to keeping business costs under control and your customers happy, a closer look at your supply chain can make all the difference in the world.
This blog post was based off of an article by the Balance Small Business. Read the full article here.