From the vendors and retailers that you sell through to the suppliers that you buy from, the strength of your supply chain is going to play a defining role in how well your business runs. Simply put, if you don’t pay attention to the weak links in the chain, you shouldn’t be surprised when they break. Here, we’re going to look at your supply chain and how to ensure they help you hold strong.
Track their performance
Make sure you’re fully aware of whether or not a supplier is truly living up to their end of the bargain. Consider looking at supplier relationship management software like Proactis. This technology can help you track the performance of your suppliers over time, using KPIs to see how often they’re able to meet your needs, and any delays or issues with your supply. Some issues are expected, but too many can start affecting your return on investment.
Expect transparency and legitimacy
As mentioned, some issues are expected with any supplier. Every product that they could supply can be affected by changes further up the chain. Perhaps their own supplier runs into an issue, so they can’t provide you with what you need. That isn’t entirely unforgivable. However, they should know to get in touch and to offer forewarning. Clear and transparent communication of any issues that could affect your supply chain is the least that your providers can offer, so don’t expect any less.
Reward those who do good work
So far, we’ve been talking about how to manage suppliers and the risk of them not delivering for you. It’s a very real risk, of course, but what about the other side of the coin? What about suppliers who are doing a good job by you and providing top quality materials, tools, and equipment? If they are a manufacturer that offers a diverse range of products, like Ceratizit, you may want to consider rewarding them with more of your business. Switching from less reliable providers to your most reliable ones can help you manage the risk of the chain even better.
Know when to negotiate
When it comes to cutting costs and saving money in your business, then your supply chain should be one of the first places you’re willing to look. If you’ve been tracking supplier performance, then it’s likely that you’ve found some who might not be living up to their promises. Before you switch suppliers, however, consider negotiating a better deal for them. If they can lower their prices to maintain your custom, then it might be worth dealing with a little efficiency as far as your bottom line is concerned. Of course, you shouldn’t be willing to sacrifice too much for a good deal, but that line is yours to draw.
A supply chain that is proving too expensive to manage or too unreliable to lean on is a serious danger to your business. Don’t be afraid to look around the market for ways to improve it. Pair only with those who can consistently supply the top quality items and can be honest about when their supply is threatened.