Small business owners need a reliable supply chain to maintain inventory that meets the demand of their customers. An error along the line may cause disruptions that affect your company’s supply. This has a negative effect on your sales and profits. It is important to identify supply chain mistakes so that you can avoid them.
Here are the mistakes in your supply chain operations you need to know about.
Miscommunication with Suppliers
Some owners fail to communicate properly and regularly with their suppliers. This leads to confusion and miscommunication about delivery items, payment terms and others. This causes delays and setbacks in re-stocking your store. It is important to establish communication lines whether by phone or email. This allows both sides to do their jobs and avoid problems when delivering and receiving goods.
Not Sharing Important Information
Your supplier or suppliers should have all the information they need to deliver the goods you bought on time and in good condition. Omissions or delays in sharing details may cause a setback. This negatively affects your inventory which also affects your sales. Make sure to always share details about your purchases, addresses for delivery, lead times, payment terms and other pieces of information relevant to your suppliers.
Unpreparedness for the Unexpected
Some entrepreneurs fail to prepare for supply chain mistakes. These cascade and worsen because of unpreparedness. This leads to higher costs, delays in deliveries, lost revenue, and understocking. In such cases, they might not be able to provide enough products for customers. You’ll never know when a disruption may arise. A supplier may encounter financial difficulties and fail to comply with your orders. A natural catastrophe can also disrupt supply chains. The best way to handle these is to prepare for them in case they happen.
Lack of Understanding of Supply Chain
Basic information about your suppliers is insufficient. You need more details to protect your small business from disruptions. Review your suppliers and learn more about them. This includes the number of days they work (especially if you are sourcing from another country), the times when they have holidays, the number of deliveries they can make, the number of shifts they have and other similar details. This allows you to create a delivery and order schedule. You can implement lead times so that your store does not experience under or overstocking.
Failing to Digitise
Paper documents can get lost or misplaced. This makes monitoring deliveries and orders from suppliers difficult. It is better to digitise all documents pertaining to your supply chain. This simplifies organising and tracking them. It also becomes easier to access them regardless of your location. As long as your data is in the cloud, it is simpler to update, rectify mistakes and share information.
Not Building Relationships
A good business relationship with suppliers allows you to get better payment terms. You get to reduce costs and maximise your profits. You will also have more leverage. A supplier can give you credit and discounts for bulk orders. They are also likely to prioritise you because of the rapport and relationship you cultivated with them.
When you identify the supply chain mistakes you might make, you are able to avoid or correct them immediately. If you are looking for first-rate bookkeeping services for small business owners, you can reach out to us at Robookkeeper. We can connect you with experienced, virtual bookkeepers that can do your small business’ bookkeeping for you.
