Managing your Supply Chain in Three Easy Steps

You have a big order and are excited about the money you will make when you fulfill it. But first, you have to figure out how you will do it.

Your supplier is out of stock of a key material you need. You can't find it anywhere else and are now losing sleep and stressed out. - How could they have the audacity not to have this item you need when needed?

See, In the same way, customers are an essential part of your success, so are your suppliers.

Ultimately, you need to source dependable suppliers and tell them what you need.

The stuff that goes into creating your products goes through a journey from manufacturers to distributors, to retailers to customers. You never know what can happen along the way.

It is essential to try to mitigate the risks of the supply chain. But how do you do that?

1. Understand Your Product Trends

Study your sales and understand what a typical month looks like to you. Consider promotions that you may have or months when you sell more due to special holidays.

When you know what a typical month of sales looks like, you can tell your suppliers what you will need at particular times.

It also makes it easier to average the items needed for months of higher gross sales. You can begin to pre-purchase them some time ahead.

When you do this, you ease the burden of finding the money to make a significant investment during these periods of higher demands.

Next...

2. Choose Trusted Partners

Now that you know the quantity of products you require monthly, it's time to find dependable partners.

Try to find one or two sources. Then, approach them, specifying your needs.

Figure out if they will be able to fulfill the capacity that you need. Specify an amount you can commit to for some time. When you are just getting started, this can be as short as three months to test what the relationship would be like.

During this time, ask yourself.

Are you satisfied with their services?

What do others say about working with them?

Can they grow together with you as you expand?

Do their values align with your company values?

If your experience with them is good, consider entering a more long-term partnership.

Share the specifications of what you need so they can include your needs and add them to their current demands. Doing this is especially important if you demand a large quantity of products.

3. Have a Contingency Plan.

Although you have a partnership and can relax a little more now, you still need a backup plan.

Life is full of unexpected circumstances, so finding one or two more suppliers offering the necessary products is crucial.

You don't need to agree with them formally. Inquire about prices and availability. Develop a contingency plan and put it in writing.

So, if there is a problem with your current supplier, you already know where to source your products, have an idea of pricing, and don't need to worry about the stress of figuring things out at the last minute.

There is no way to mitigate 100% of the supply chain risk.

But by learning the trends, studying your demand, and communicating with your suppliers, you can minimize periods of stress and scrabbling for essential product ingredients.

The Challenge

If you still need a structure for your supply chain, consider spending some time this week learning your trends and setting up a supply chain plan.

And share with us how it goes. It's not always easy, but it's great to think about this before you are in over your head trying to find the things you need.

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