A quick growth in your business can be super exciting. But if you don’t know how your supply chain management strategy will evolve with your company you might limit your growth.
Let’s go with a pretty simple analogy on this. If you gain a bunch of weight you would buy bigger clothes or go lose some weight at the gym. For now, we will use buying bigger clothes. If you kept gaining weight would you keep wearing the same clothes? No right. Well Supply Chain Management works the same way.
After all, if your company is growing and your supply chain management doesn’t change to match its new size, things may eventually start to fall apart along the seams. And when that happens, your customers will definitely notice and give an earful to their friends and followers on social media—and your customer service representatives.
So if you’re looking for ways to upgrade your supply chain management as your company expands, you may want to try some of these strategies—because the right time to tighten your belt is not when your company is gaining market share.
1. Make sure you have alternate vendors.
You’re growing. Are your suppliers?
Hussein Suheimat is the CEO of SMMC a custom CNC manufacturing business in California.
“Being in manufacturing, supply chain monitoring and improvements are a vital part of our business,” Suheimat says.
But because his company uses a lot of varying metals (Steel, Aluminum, Titanium, etc.) in its production, supply chain management can get complicated, he says.
“The price of materials is constantly fluctuating and so supply chains must be monitored on a nearly daily basis to ensure that we’re getting the best product at the best price,” Suheimat explains.
“Unfortunately,” he continues, “gone are the days when you could work with just one vendor and expect stability in your supply chain. It almost feels like old street markets out there—where you haggle and barter in real time to get the best price.”
2. Mitigate risk to help your supply chain management.
If you aren’t doing risk management when you’re updating and improving your supply chain, you haven’t really upgraded or improved much. Your supply chain may be bigger, but it may also be more vulnerable to potential problems than ever. The best way to manage risk is to be proactive. This means while you have a supplier who is performing well and meeting all of the key performance indicators, it is critical to have a risk plan on what you will do if that supplier suffers a catastrophic event, financial issues, loss of key personnel or some other event which put at risk your ability to get product.
Every time you make a big change to your supply chain without also implementing a backup plan if something goes wrong, you may be weakening your chain instead of strengthening it.
3. Continue to update how you analyze your data.
Are you running out of inventory?
Have you had production or technology problems?
Are the updates in your supply chain management system allowing you to know what’s going on in your supply chain at virtually every moment?
The problem may be in how you monitor, collect and analyze information.
Here’s a question every company should be asking: Are we using data to make decisions —or merely to justify our decisions?
Companies need to be looking for a software or data services solution that can provide the right data in real time, so their key performance indicators can alert them to potential problems long before it results in an inventory shortage or other serious situation.
Keeping up with data is crucial for supply chain management, whether it’s going through an update or not.
We have to use precise forecasting of our sales and projects, in order to really dig in on our supply chain needs and think five steps ahead.
A lot of this isn’t necessarily from crunching numbers, but rather having regular clients and talking to them.
If you don’t want the tables turned on you, consider looking for ways to upgrade your supply chain as your company expands.
The larger your company gets, the more you have to invest in your supply chain management to keep your executives, employees, suppliers and customers happy. And that can feel like a weight has been lifted off of you.