How supply chain management can help your business grow

5 min read
Kristine Wright

Whether you’re a brand new business owner or a seasoned hand, it’s crucial that your supply chain management practices are rock solid if you want your business to grow.

The supply chain includes everything that goes into the goods or services your business produces.

Supply chain activities cover everything from product development to production and delivery, as well as the information systems needed to coordinate these activities.

The goal is to make sure each stage is cost-efficient, streamlined and constantly improving to meet customer demands (quality, cost, etc).

4 reasons to love supply chain management

Here are four different ways supply chain management can benefit your small business.

  1. Keeps costs down.
  2. Drives profits up.
  3. Maximises efficiency and increases market presence.
  4. Makes customers happy.

Before we dive into the details, let’s explain how supply chain management can benefit very small businesses.

The supply chain is the lifeblood of any business

Effective supply chain management can make or break a small business. Maintaining tight controls of internal inventories, production schedules, sales and vendor inventories is essential to successfully contending with larger players in the market.

A small clothing boutique will have substantially fewer funds than corporations such as H&M or Uniqlo.

Supply Chain Management Cloth on Loom

In order to be a viable contender in the marketplace, the clothing boutique needs to maintain a supply chain that addresses all facets of their business, including:

  • Planning/strategy
  • Finding raw materials or services
  • Manufacturing
  • Warehousing and delivery
  • Returns

By drilling down into each of these supply chain stages and cutting out unnecessary costs and wasted resources, small businesses can increase profits. A tight, sustainable supply chain will give your business the cash reserves it needs to grow.

1. Keeps costs down

Without supply chain management, a small business will be unable to keep production and operating costs down.

For small businesses and startups with limited resources, this can have devastating results. Every penny counts when it comes to growing a small business, so a sustainable supply chain will help cut unnecessary costs and keep the cash flowing.

The less you spend on producing and delivering your product, the more money you keep as profit.

It’s important to note here that reducing production costs can come through negotiating your supplier terms of payment, and shouldn’t have any impact on the quality of the products or services you are selling.

2. Drives profits up

Supply Chain Management Cheese Factory
Cutting waste and unnecessary expense will increase your profits.

The growth of your small business depends on your ability to profit as much as possible from every single aspect of your operations. A good supply chain manager will be able to strike the perfect balance between cost savings and quality.

Low production costs can help a small business maximise margins.

This in turn allows them to produce more, benefiting from economies of scale in purchasing raw materials, production/manufacturing, warehousing and logistics.

This will often result in an increase in the kind of vendor and wholesale opportunities that can allow a business to grow exponentially.

3. Maximises efficiency and increases market presence

When it comes to delivering products or services to customers, speed is important. In order for your business to grow from strength to strength, you need to figure out the most affordable yet fastest method of getting your products out there.

With diligent supply chain management, you can deliver your products wherever they need to go in the shortest time possible thus establishing an image as a reliable business.

4. Makes customers happy

Customer satisfaction is crucial in building a lucrative business no matter what size or sector you are in.

Small businesses have it a little tougher as they need to stand out in a sea of bigger businesses.

Supply Chain Management Closeup of Bracelet
Deliver high quality at a competitive cost and customers will come running.

Most of those bigger business have the resources and reputation to sell their products and services widely. Because of this, it is so important for startups to nurture customer loyalty and build a following that will lead to word of mouth referrals.

Successful supply chain management means not just focusing on the customer who purchases your end product, but also maintaining strong relationships with your suppliers. The aim is to make the customer experience seamless at every stage of the buying process and beyond, including customer complaints, return policies and after-sales service.

Tighten up your supply chain and thrive

From initial product planning and production to delivery and returns, each stage of your supply chain should efficiently connect the individuals, teams, resources and technologies required for the manufacture and sale of the product or service you provide.

Proper supply chain management can help your business grow in a myriad of ways, including by:

  • Minimising costs across all areas of your business
  • Increasing profits and freeing up cash that can be used to seize new opportunities
  • Maximising efficiency to spend more time and money on promotional avenues including a website and social media marketing
  • Nurturing a loyal customer base

Supply chain management software such as NetSuite, Xero and Salesforce have made it easier than ever to streamline and automate your business processes. Research the different options to find one that suit your needs and budget. Before you commit yourself, make sure you have a solid grasp of how to make full use of its features and benefits.

The key to growth is in your hands!

Editor’s note: Know what else helps a business grow? A great-looking website. Launch your website today with our 30-day risk-free trial. Includes all you need to promote your product or service widely — social, search, the works.

Products Used