Lesson 10: Supply Chains
What You’ll Learn: Supply chains aren’t just for mega-corporations. Every business large and small has a supply chain in one form or another and maximizing its efficiency, flexibility and redundancy is essential to your success. We’ll show you how to build a chain that supports your current and emerging needs, ensuring that it will grow and mature as your business does.
Supply Chains
“The Supply Chain stuff is really tricky.”
Elon Musk
Introduction
As an entrepreneur, it’s easy to overlook the supply chain, as it conjures up images of giant container ships coursing their way across vast oceans and massive distribution centers filled with products as far as the eye can see.
But supply chains aren’t always that grand or glorious. And they aren’t just for big corporations. In its most basic form, a supply chain is everything that needs to happen to get your product from Point A to Point B.
The supply chain can be one of your biggest assets or biggest risks. The good news is that small businesses have an advantage over the big guys because the supply chain itself is easier to set up and manage and far more flexible.
Factoring in your supply chain early will help you reduce costs, build stronger relationships and deliver higher profits as you streamline efficiencies and optimize the chain.
Three Mission Critical Considerations
To successfully manage your supply chain, there are three things that need you need to focus on.
Supplier and stakeholder relationships
Build partnerships – You want to find suppliers and other stakeholders who bring value to your company in the goods, materials and services they provide. Obviously, you want these relationships to be cost-efficient, but you also want them to be reliable and easy to maintain. Loyalty is an admirable trait, but it doesn’t pay the bills. Make sure your suppliers are performing the task they were asked to do and are meeting your expectations as well as those of your customers. If they aren’t up to snuff, you may want to find a new partner.
Your Instructor
Tommy Gantz is the Association of Washington Business (AWB) Director of Governmental Affairs on tax and fiscal policy. Previously she was a supply chain strategy analyst for Boeing Global Services, where she evaluated markets and trends while communicating strategy and evaluating performance metrics.
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Keep the good ones going – Once you’ve established a relationship with a trustworthy vendor, make sure you continue to build it. Like any relationship, building rapport and trust will increase the security and resiliency of your supply chain, even when weather, market conditions or environmental risks create challenges.
Ethics, sustainability and responsibility
Customers want to patronize businesses that are aligned with their values. They want to deal with sustainable and responsible enterprises that reflect and embody their ethics. The same is true in business-to-business relationships. You want to find and work with supply chain partners that are aligned with who you are and reflect the same characteristics you hold to be important. Make sure you talk about what’s important to you and your business as you build relationships with suppliers and contractors, including delicate subjects like human rights, social justice, equality and diversity.
Risk management
Your business is only as good as its supply chain. Even when you’re just starting out, you want to manage your supply chain with risk in mind, planning for the worst while expecting the best. As you manage risk in your supply chain, consider:
Marketing intelligence – Larger businesses can hire other companies to keep them informed about what’s going on in the marketplace. As a small business, you will need to do this work yourself. Staying up to date on news and trends will help you stay a step or two ahead of the competition. That said, your suppliers and contractors may be willing to keep you in the loop as well, so don’t hesitate to ask them.
Supply chain continuity – The supply chain itself changes continually. Things like trade wars, climate change and yes – global pandemics – can upend your supply chain. Continually reevaluate your risk in light of events that are happening domestically and around the world, such as product recalls, safety notices, industry or societal unrest, etc. so you can be agile while protecting the bottom line and the needs of your customers.