It’s a tough industry out there and it has never been more important for small businesses in the logistics industry to avoid making costly mistakes and to ensure they keep their supply chains healthy. For a business in the logistics industry, if their supply chain is not functioning properly, then neither will their business. Supply chains play a vital role in the flow of goods and services between various stakeholders, including suppliers, manufacturers, retailers, shippers, wholesalers and, of course, customers. Zak Sivalingum, regional head of FNB, sheds some light on 3 supply chain mistakes that SME’s should avoid.
Unwillingness to Adopt Technology
Technology plays a significant role in our modern world, and more SME’s are digitizing their processes and operations within their supply chains. For example, through the use of technology, businesses can now streamline services, improve efficiency, shorten their business cycles and limit manual processes through e-commerce. “Furthermore, technology helps in simplifying the communications process by enabling stakeholders and customers to have real-time access to information about goods and services” says Sivalingum.
Not Performing Due Diligence
For any business, working with both credible and reliable suppliers is a critical component of good supply chain management. If a business fails to conduct proper due diligence when choosing suppliers, this can lead to that business losing its competitive edge and reputation, as well as wasting time, money and developing inconsistencies in service levels which would ultimately lead to the business being unable to deliver on its ability to fulfil contractual obligations. The benefits of investing in developing good business relationships with suppliers include improved efficiency, business referrals and cost reductions as the businesses form strong mutual relationships.
Failure to Control Costs
Managing and containing costs properly is key in ensuring that a business remains profitable. Depending on the nature of the business, the first step should be to get rid of any wastage by proactively managing the business’ processes and procedures. Having an active monitoring strategy in place is also essential, as this helps to deal with key areas that contribute to high supply chain costs, such as warehousing, transport and inventory management. “Lastly, inadequate cash flow and working capital can severely impact a business’ ability to manage operations and its supply chain. SMEs end up in a desperate situation – making incorrect decisions, which lead to even greater cash flow challenges” concludes Sivalingum.
TSI’s technology and our expertise will take your SME to the next level. Let us help you avoid common supply chain mistakes. Not only do we offer a cost effective solution, but our technology will streamline your business, allowing you to make changes that lead to further savings and a more effective and efficient supply chain. Send an email to firstname.lastname@example.org today to find out more or to do a rate comparison.