Supply Chain Management for the Small Business Owner

By: Shay Rosen

Supply chain management can be a complicated endeavor for multi location retailers, wholesalers, manufacturers and other business entities, though it's no less complicated for small business owners and job shops who rely on the precise availability and deliverability of goods. If anything, small business owners have even more at stake, as they often lack the operating budget to withstand serious disruptions in the supply chain that would be more easily dealt with by larger businesses.

Though many factors can be well outside the control of small business owners, there are two measures that can be undertaken to reduce the possibility of disruptions within the context of supply chain management. The first of these measure involves establishing a deep inventory network.

An inventory network configuration involves the total number of suppliers and associated production facilities and distribution centers available to a business entity. One of the most common mistakes small business owners make when it comes to inventory is assuming that backup inventory is the only way to sufficiently insure against unexpected shortages. This can become a real issue as few small businesses possess the space or capital to invest in backup inventory, or are in an industry that involves perishable goods. The solution is to seek out and maintain relationships with backup suppliers while staying on top of availability from active distributors in a network. By doing so, small business owners safeguard themselves from shortages only at the risk of reduced profit margins and small scale delays. After all, there's a reason why some suppliers are primary while others are secondary. The only industries that cannot compensate for unexpected shortages through this method are those who offer production or assembly of customized goods.

The second measure is tied into logistics and involves establishing a backup distribution network. This can be as simple as finding another shipping company, delivery service or courier and being set up to utilize their services ona moments notice. As most logistics companies charge on a per freight basis, it's a small expense to be prepared for an immediate changeover should the need arise. Setting up accounts with logistics providers, including credit and manifests can take days or weeks, depending on the area of service. Being prepared beforeheand can mean the difference between shipping on time and not shipping at all for many small businesses.

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