Due to the internet and e-commerce, the global supply chain is interlinked and the world is one huge marketplace. However, constant external and internal changes in this marketplace can affect small-scale businesses the most. These can include extended limitations due to COVID-19 lockdowns, natural disasters like tsunamis and earthquakes, or war and military conflicts. Businesses may have no control over these things, but they still feel the aftershocks even after months.
Small businesses are often short on budget and don’t have a lot of financial cushions. Any supply chain issues can disrupt their cost price and directly affect their profits. Moreover, they usually can’t rely on alternate sources for raw materials due to logistical reasons as well. Even if the businesses outsource some processes to companies like Telvista, their overall cost can increase if they don’t curb supply-chain imbalances. This article will talk about a few ways small businesses can overcome a supply chain crisis.
1: Be Proactive
The difference between overcoming a supply chain mismanagement and falling prey to one can be proactiveness. If businesses fail to plan their next move, they are more than likely to end up in a difficult position without any contingency plans in place. Planning ahead can help most businesses to think on their feet and make informed decisions. Moreover, it can be possible to identify any potential risks and create more opportunities to prevent mishaps.
2: Track Inventory
Keeping a keen eye on the business’s inventory can be crucial for maintaining a smooth supply-chain management cycle. However, it can be difficult to always track changes to goods and inventory. Many businesses use lean processes and supporting software to help them track what goods are short in supply. This can help you stock up on items that may get affected due to external or internal factors. Moreover, tracking inventory and supply chain can also help free up space in storage that sufficient or easily-available goods may be taking up. Your business can use that space for other goods in lesser supply or for logistical purposes.
3: Search for Alternative Suppliers
Most SMEs don’t research for alternatives and can end up relying on one supplier. This can be very harmful, especially for high-selling and popular products. If anything goes awry with your shipment, you will have to face the brunt of it in more ways than one. Therefore, it is important to always be proactive in approach, think with an open mind, and have at least one other alternative.
Creativity knows no bounds and you can also offer creative alternatives to your customers in case of a crisis. For example, you can put up discounts for other products so that clients are more inclined to buy those instead. Alternative solutions to reducing costs can also help you maintain the price of your product for a longer time.
4: Look Out for Deals
A good businessman always knows where they can cut their costs from. So, a keen and effective eye on the market and its pricing is necessary. Business owners should look out for lucrative pricing deals for raw materials. Any time there is a deal, you should grab it and stock up on the product as much as you can. In the longer run, this can help you keep your costs low while your competitors raise their prices because of a potential supply chain issue.
5: Use Automation Tools
Large corporations often make use of supply chain management (SCM) software to help with multiple-product inventory across various departments. However, small businesses don’t use SCM software and that may be the biggest reason why they suffer more from supply chain discrepancies. The software can help streamline things and make human error obsolete. Automation tools and software can help build lean processes that are much more efficient.
6: Do a Sales Forecast
Sales forecasts can help small and large businesses make close to accurate assumptions and understand their key-selling products. Building a strategy based on a sales forecast can help businesses navigate even the most unpredictable supply chain problems. A sales forecast can help you understand what products sell the most and in which quarter. As a result, you can base your product buying and stock up accordingly.
7: Stay Updated
Supply chain issues can occur at any time but if business owners remain current on the trends and know what’s happening globally, they can be predicted. For example, in recent times, most supply chain issues stemmed from the pandemic lockdowns across the world and the Ukraine-Russia conflict. Other causes could also include natural disasters, location, business category or economic factors, etc. So, the more updated you are on the ever-changing trends, the more you can plan better.
Political instability, climate change, global politics, and war-stricken areas make the future of supply chain management uncertain. Moreover, the world is shifting towards ethical and sustainable sourcing and small businesses also need to change accordingly.
