Whilst working in a business selling products to your customers whether as a supplier, retailer or ecommerce seller, you would more than likely have discovered the term ‘Supply Chain Management’ otherwise known as ‘SCM’. This is a term becoming increasingly popular with expanding markets managing their supply chain activities.
The more organised a business is at handling and managing their end to end supply chain, the less problems they encounter along the way, making the whole process more efficient, cost effective and smooth running, resulting in happier customers and more profits. If there is a kink in one part of the chain such as the sourcing of products, fulfilment of orders with pick and pack and packaging the items or even the distribution of the goods, it will cause delays and possibly increase costs, reducing profits for your company. This is something that no business owner wants to encounter.
Let’s take a look at the areas of supply chain needing to be managed
There are many parts to supply chain management that you may not have considered when looking into this minefield of information and when outsourcing each part you need to ensure each department works to the best of their ability and is the most suitable choice for your business. Every business is different and taking a good look at how you want your business to run from the start will help you to plan and outsource your procurement to companies that will work with you helping your business to grow. Choosing to outsource to companies based purely on price is not necessarily the best option if they are not going to handle your products correctly and efficiently.
Most companies start with an idea of selling certain goods. Perhaps they have seen a gap in the market which they believe they could fill or are noticing buying trends in the market and want to jump on whilst it’s hot. Sourcing goods from trustworthy suppliers/manufacturers at the best prices, without sacrificing the quality is the first area to consider. Once this has been agreed and your stock is on its way your next port of call would be the warehousing element of the chain. Finding a reputable logistics company who can preferably deal with the majority of warehousing and distribution requirements you may have, such as pallet storage, fulfilling your orders and distribution of your goods to your customers is nowadays easier to find as many 3PL providers will be able to assist with a range of services. Even if they do not cover a service themselves they will most likely have partnerships in place with companies that are able to provide a particular service at reasonable rates.
Packaging your goods
If you have sourced your goods from a different country and want to change the packaging before the goods are sent out to your customers, this is something else to consider. Perhaps your goods do not arrive packaged and arrive loose in a container. If this is the case, the warehousing company will be able to palletise your goods on arrival ready to store. Some warehouse companies will assist with providing packaging for your goods for a small charge however you may wish to find alternative solutions for your packaging due to specific requirements.
Stock control can be managed within the warehouse as they will keep a record of how many pallets have come in and gone out and any order processing that has been completed. Automating this process via supply chain management systems may help with the speed and accuracy of managing this area of business. This will allow you to keep on top of how much stock you have of different items making it easier for you to know when you need to place another order with your supplier, ensuring stock levels do not drop too low and also that you do not have surplus stock of products you are unable to sell. Warehouse space costs money therefore to have stock sitting in the warehouse not moving is unproductive and costly for your business.
Distribution and Haulage
The distribution of goods to your customers is another part of the chain that requires good management skills. Being kept informed of timed deliveries will ensure you can deal with any problems that arise quickly avoiding the possibility of an angry customer awaiting the goods. Finding a reliable and professional haulage company to transport your goods will be a vital part of the process as this one area, if not dealt with to your customers standards can make the difference of repeat orders or not.
Great customer service is vital for any business and keeping customers informed of any delays will ultimately help build and maintain your business relationship.
Another area of customer service needing managing is your own staff and ensuring they are fully trained in the areas they are assigned to. If your workforce and not engaging your customers and are sending them away in droves then this is the first area to train them in. As the saying goes, “you can lead a horse to water but you can’t make it drink”. You may be getting customers through your doors but are they buying? Are they happy with the whole experience? It goes without saying that if a customer has a pleasant experience and is greeted and dealt with by a friendly smiling staff member then they are more likely to tell a friend and buy from you again.
So as you can see the supply chain management process entails many parts of your business and getting this correct from the start will lead you on the road to success.