Your supply chain relates to the network you develop that helps you get things from an idea to a product that your customers can purchase. For example, if you are manufacturing your own unique products, you will have suppliers that sell you parts or raw materials. You may even have other suppliers that manufacture elements of your product for you. Essentially, these are the businesses you depend on to let you produce your product and sell it to consumers.
You don’t even need to manufacture anything to have a supply chain. Retail businesses and restaurants have big supply chains as they depend on other businesses to supply products, ingredients, materials, and so on. Regardless of what you do or sell, you will have a supply chain that you depend on.
Unfortunately, supply chain struggles are a real thing. This means that issues can happen along your chain that impacts your business. Consequently, you might end up without the right products to sell or with poorer quality products. To prevent this, you need to avoid some of the common supply chain issues:
Unreliable Suppliers
A big issue for some small businesses is a supplier that becomes unreliable. You have agreements on when they need to provide you with supplies, but they keep breaking them. Instead of receiving the goods on a set date, you don’t get them for another week. This can have devastating consequences on your bottom line as you may be without products to sell for an extra week, meaning you lose money.
Naturally, you want to avoid this by ensuring you work with a proficient company. Check a company’s history before you agree to work with them. See if you can contact any other businesses that work with them – check reviews – do whatever you can to be certain that you’re not getting into bed with an unreliable supplier. If you already have an unreliable supplier, it’s time to cut them loose and find someone new.
Controversial Suppliers
As a business, you want to do everything you can to avoid controversy. They say that no press is bad press, but that’s really not true for a small business. If you become embroiled in a controversy, it could be curtains for your small company. Sadly, a lot of businesses end up with black marks against their name because of their association with other companies – particularly those in your supply chain.
Some common issues that might occur relate to environmental or human rights concerns. Your suppliers might provide their workers with terrible labor conditions, meaning they overwork and underpay them. If you pay this company to be your supplier, you’re basically endorsing what they do. If word gets out about their working conditions, it looks so bad on your business. Not to mention the fact that you might support a business that does things that could be damaging to the environment or to the people that work for them. Avoid controversial suppliers by doing background checks before signing contracts. As a general rule, try to hire suppliers that align with the same message and vision as your business.
Expensive Suppliers
Lastly, you have the struggle of dealing with a very expensive supplier. You might look for a company to supply something, but they are charging you way too much. As a result, this impacts your bottom line as it is harder to make a profit. You need to increase the sale price of your goods, which might put consumers off buying them. Or, you make less money if you keep the price the same.
Clearly, the solution is to avoid expensive suppliers. Sometimes, you feel as though you have no choice because all the suppliers you’re looking at are expensive. In scenarios like these, looking towards overseas suppliers might be a better option – just ensure they are reliable and free from any controversies. Other times, you work with a supplier for years, and they gradually up their rates. You’ve become so used to working with them that you’ve not even bothered to see what other options are on the market. It might transpire that there are cheaper suppliers that are just as reliable. Here, you can terminate your contract and move to a supplier that’s more affordable. Or, you can tell your current supplier that they’ve become too expensive and see if they offer a reduced price as a way of thanking you for your loyalty.
Supply chain struggles are real, and they will definitely damage your business if left unattended. Avoid the three issues above by taking some of the steps we’ve covered.
