No matter what you sell, you have a supply chain. Perhaps you are the manufacturer and must get goods to your customers. You might run the transportation company that gets products from one location to the next. Perhaps you are the retailer and rely on a supply chain to keep things moving smoothly.
No matter where you are in the supply chain, you can take some steps to protect your business even during difficult times. The business Invesp reports 79% of companies with well-managed supply chains see greater than average revenue growth. Taking the time to tweak your supply chain is smart.
How do you protect your supply chain business when you aren’t in control of every facet of the process? You must rely on others, but you can still do several things to avoid disruptions:
1. Review the Process
Before you encounter a problem, spend time reviewing the supply chain process. In every business, there are weak links. Do a complete audit, involve your employees and figure out what needs to be tweaked.
Look at suppliers who regularly run late. Is there a different option for getting supplies? If not, can you discuss the issues with the other company and figure out a solution? Perhaps you need to adjust your ordering schedule to allow for regular delays.
How does your warehouse function? How fast do products leave once they’re ordered? Can you do anything to speed things up and prevent your customer base from seeking a competitor?
2. Secure Your Products
If you own a warehouse, your inventory is likely your biggest asset. You must take steps to protect your goods so you don’t lose them to theft, the elements or other disasters. Your loading dock is an essential part of your business and the process of moving things to and from your warehouse. However, it is also a vulnerable point.
Regularly assess truck doors and equipment to make sure everything operates correctly. Weak panels are a prime opportunity for burglars. Locks that don’t function correctly present an opportunity for theft.
You can also add dock leveler seals, which protect against people and the elements. Other options include lock-landing gear. Create routines, such as closing doors when they’re not in use and performing end-of-shift checks for locking doors. Adding cameras can also deter employee theft.
3. Manage Customer Expectations
Big retailers, such as Amazon and Walmart, have set a standard of two-day delivery. Unfortunately, this isn’t always possible for smaller suppliers. A golden rule in business is to under promise and overdeliver.
When estimating delivery, set a date a little beyond what you know you can achieve. When the customer receives their order early, they’ll be thrilled. You’ll also allow some flex room in case of a disruption beyond your control.
4. Watch Out for Cyberthreats
If you’re like most modern businesses, at least part of your system involves databases and cloud storage. The last thing you need is for hackers to access your customers’ information, which could also open your big data up to conniving competitors.
According to Google's Transparency Report, phishing scams increased 130% or more in the last few years.
Your best line of defense is in training your employees to watch out for phishing tactics. Conduct regular training sessions. You should also install firewalls and virus protection. If you use a third-party provider, you’ll gain the benefit of their more advanced security systems.
5. Protect Your Profits
Keep an eye on your costs. If you don’t track your profit levels regularly, it’s easy to experience rising costs on your end and end up not passing them on to your clients. Over time, you’ll make far less than you should or even operate at a loss.
Your expenses involve employee salaries, transportation costs, supplier product price increases and even unfixed costs such as heating and cooling your building. Ideally, you should review your costs and fees every six months.
6. Have Alternate Vendors in Mind
The COVID-19 pandemic is a good example of why you should always have options for where you get your own supplies. Complete government shutdowns in some countries delayed the launch of vehicles and smartphones for various companies. However, brands with suppliers in another country continued business as usual.
If you currently have Chinese suppliers, look for a backup vendor in a second country. Ideally, the two suppliers should be in very different parts of the world. While we are unlikely to have another global pandemic of the same proportions, it’s smart to prepare as if there might be.
7. Ramp Up Physical Security
While your biggest threat might be internal, you can’t underestimate the importance of external breaches. What if someone could just walk into your building, jump on an unguarded computer and access all your files? What if a robber overpowers a single security guard?
Look for ways to improve the physical security in your complex. Options might include adding a tall fence and guard dogs, using a guard house access point or installing high-tech entry points that can be recoded in minutes when a disgruntled employee leaves.
Test Your Systems
Conduct regular audits of every system. Hire a professional who can attempt to hack into your system and identify weaknesses. Enlist an outside party to try to gain access to your building. Look for areas of the supply chain where you might be taken advantage of and rework contracts with those vendors.
With a little attention to detail and awareness of threats before they happen, you’ll have a more secure and successful supply chain business.