Managing the supply chain of a small business is much easier than doing so within a large corporation in many ways. Large companies will have supply chains that are incredibly elaborate and complex, and difficult to handle with the usual methods followed by smaller organizations. On the other hand, small businesses can manage their supply chains efficiently if they stay aware of their environment and ensure certain criteria are met correctly.

Continue reading for 6 top tips for a small business to follow to ensure effective and optimized supply chain management.

1.Choose the Right Suppliers

When it comes to choosing the right suppliers, a lot of homework is required. Once you select a supplier, the relationship has to go a long way. Selecting an inefficient supplier will eventually mean severing ties with them sooner or later and look for another, which can have highly adverse impacts on your business.

The essential criteria to look for while evaluating and assessing a supplier include cost, efficiency, consistency, capacity, reputation, and quality. You have to make the right and optimum choice based on your financial standing and requirements when you weigh quality against the cost to select a supplier.

2.Leverage the Right Technology

In our modern, sophisticated world, even the smallest of businesses will have to leverage a good deal of technology to manage every aspect of their organization. Many advanced software solutions are available today that you can use to manage your supply chain. These cloud-based systems accurately track the items you order from the supplier right from the point of placing the purchase order until they ultimately reach your premises.

Similarly, you can control your incoming stock fully and efficiently using tools like an ePOS system that can help you fully manage your inventory. This allows you to be across all stock levels at all times as it enables you to track every item moving in and out of your business. It also generates various kinds of automated reports based on stock movements and sales levels.

3.Optimize Finance

Whatever facilities you rely on and precautions you take to make your supply chain function well, you cannot ignore the importance of finance in your business. It is important to ensure that sufficient funds are kept in the budget for the right kind of spending to keep stocks replenished to adequate levels.

When you run short of money, it can affect every part of your business processes, and gradually the entire chain goes haywire. Additionally, if your business is in a growing phase, you may need to recalculate the stock requirements for scaling and secure more funds in time for expansion. Make sure you the systems in place to keep exemplary financial records such as online bookkeeping software and the best credit card machines in order to manage finances effectively. This will allow you to plan out your budget, make sure you keep on track, and help to ensure you have the funds available when you need them.

4.Perform Quality Inspections

Even though choosing the rights suppliers will ensure the quality of the received goods in most cases, it is also important to have routine quality inspections and policies in place. You should also train key staff members in stock management and quality control. The lack of a quality inspection policy may result in a faulty item going unnoticed, which can have undesirable repercussions for your business

5.Establish Effective Communication

Communication is a subtle element, and so overlooked by many, that integrates various aspects and personnel of the supply chain for the best results. Both internal and external communication is necessary to drive supply chain management forward appropriately. The relevant individuals concerned among the staff, suppliers, dealers, customers, and any other stakeholders that are directly linked to your supply chain and responsible for its smooth functioning must be at the same level of information.

They all be coordinated when it comes to the movement of goods, stock levels, requirements, and contingencies, lest the chain should be broken. There should be strong coordination in both directions, meeting suppliers’ as well as the customers’ and sub dealers’ requirements. Today, you can use advanced communication systems such as cloud-based solutions to keep everyone in the loop.

6.Maintain an Efficient Contingency Plan

A small business’s success will largely depend on how well it can handle contingencies. A robust contingency plan is also required for the smooth functioning of the supply chain. You should periodically evaluate your various options, and keep a list of a few secondary suppliers handy.

It’s also a good idea to maintain a strong rapport with secondary suppliers by purchasing items from them at times, even if it is not frequently or in large quantities so that you can fall back on them in times of emergencies when your regular supplier run out of stock or cannot supply you for any reason. You should also set internal contingency policies, and relevant staff should be trained in handling pressing situations so that the smooth flow of the business processes isn’t interrupted because of supply chain issues.

Successful supply chain management involves the completing the cycle effectively. Each step must be managed in the most effective and optimized way, right from the starting point of placing an order for procuring an item to receiving it in stock and eventually using it to bring out the maximum benefits. In other words, it all comes down to the successful management of people, resources, processes, and communication.