If you are still wrestling with shriveling margins and giving away more and more “value-added” service for free, its time you discovered what the big companies figured out a long time ago. The key to greater success is embracing supply chain principles. This was affirmed at a recent Kauffman Foundation presentation in Washington, DC on the state of entrepreneurship. Karen Mills, SBA Administrator and Obama Cabinet member, referred to supply chain as one of the three keys to business success. Read on!
1. Less is more…inventory, that is
What to carry, how much to carry, in which location(s) to carry it and how fast it turns are the important questions. Inventory can represent one of the top expense items for your company. Depending upon your business model, there are a multitude of considerations to help mitigate inventory carrying costs. Look at the past to predict the future. What slow moving items can you dispense with? Can you shift to a make-to-order or drop ship strategy? Review your business model, future plans and competitive factors with a qualified supply chain expert to determine the best strategy.
2. Bricks and mortar are heavy on your P&L
Your margins will never be as strong as the competitor that has no factories or warehouses. Savvy competitors have discovered that outsourcing manufacturing and/or distribution to other domestic or foreign suppliers can produce quality product and excellent service at higher margins. The key is getting help to craft an all-encompassing SOP to insure product integrity and customer service levels. Having a highly-qualified project manager to coordinate activity between your company, the contracted resources and your customers is also a great idea.
3. Collaborate…then celebrate
Making your supply chain a competitive advantage will depend wholly on two factors, collaboration and the timely exchange of data. Without these elements, you are doomed to mediocrity, or worse. Make it easy for every partner in your supply chain to share the appropriate data. When it all comes together, a powerful visibility factor will have been created giving your company an agility advantage that will make competitors envious and customers delighted. With all of the pieces of your supply chain laid out, your IT and supply chain staff members can make collaborative data sharing a reality.
4. Make the noise go away
Every great entrepreneur once tended to the minute details of her business in the early days. If that level of detailed CEO attention had continued, would the business have grown as rapidly as it did? At some point, the CEO needs to let go and focus on the activities that make her business great!
Work on expanding the brand with new products, developing an accessory to an already successful product or opening a new market. This can all be accomplished by getting rid of the “noise” associated with all non-core activities. This can include warehousing, transportation management, and even manufacturing. A Lead Logistics Provider will analyze your business model, help find the appropriate resources and then manage them to your company’s specifications. Then, you will be free once again to be the creative force behind your company’s growth!
5. Work on your business, not in your business
Once you have engaged a Lead Logistics Provider to make the noise go away, you will achieve business nirvana; you will be able to work on your business and not in your business. There is a distinct difference. CEO’s that “get it” are the ones who achieve the greatest measure of success and work/life balance.
Let your competitors play by the old rules. Let them stagnate! You now have the five keys to success. Unlock the possibilities!
Samuel R. Polakoff is president of TBB Supply Chain Guardian. TBB is a 67 year old lead logistics provider specializing in small, medium and early stage companies. TBB manages supply chain functions for companies around the world. Sam’s industry insights have appeared in the following publications: The Journal of Commerce, Traffic World, Inbound Logistics, The Baltimore Business Journal, The Baltimore Sun, The York Daily Record and The Central PA Business Journal amongst others. Sam currently authors The Supply Chain Guardian Blog. To learn more about creatively optimizing your supply chain, contact the author at srpolakoff@tbbgl.com.
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