If you are new to it, establishing a supply chain can be a surprisingly daunting task. According to Mark Roemer Oakland, to establish a well-connected and functioning supply chain you need the right raw materials, components, subsidiaries, and efficient management. Let’s see how you can set up an airtight supply chain:
- Begin simple – As a young entrepreneur, you must know what your customers want. Use that insight and judgment to create that next great thing. You can always hone those judgments and intuition with data. For instance, you can figure out what needs to be in your inventory by looking at what sold well in the past. It’s very important to keep things simple at the beginning. Your simple lineup of SKUs(Stock Keeping Units) can always be expanded as your company grows. You will learn how to manage a complicated assortment of products as you expound, not when you are just starting.
- Predict Demand – This is very important to maintain an airtight supply chain. You need to have a deep understanding of the sales and potential sales of each product in your lineup. Each detail needs to be noted, from the color to the size. This analysis helps you be at the top of the game without going over or under buying inventory. That’s the reason Amazon can meet the promise of one-day delivery. Their wealth of data allows them to predict the demand of every product for every city or neighborhood and stock the nearest fulfillment center accordingly.
You won’t have access to valuable data at the beginning. However, an Excel sheet would allow you to have great insight over demand if you keep a simple product assortment. As your business grows you get access to sop[histicated tools to streamline the analysis and predict demand.
- Track purchase orders – Once you place orders with suppliers, you should strictly track them. It gives you the time to adjust if products or components arrive damaged or get delayed. When you are at the top of your game, you won’t have to provide an inferior product or service to your customers due to unforeseen delays or other such issues.
- Inventory tracking – You should also get a tool to track your inventory. The tool should inform you about the exact position of the inventory between you and your supplier whether it is on the ship, at the harbor, or at the nearest warehouse. This kind of tracking gives you visibility to adjust to unanticipated delays at the customs or anywhere else along the route.
- Order fulfillment – Once you have your inventory in your warehouse, you can use specialized tools to distribute the correct amount of inventory to various channels including your e-commerce website, wholesale business, and retail stores. The tools should also notify you when you are running low on inventory or if a channel has exceptional sales so that inventory allocation can be improved there for order fulfillment.
Mark Roemer Oakland suggests that you follow these steps to set up an airtight supply chain.