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uccessfully building out a supply chain from sourcing to delivery can feel overwhelming because of all the parts involved, such as predicting when materials will arrive and managing changing tariffs. That said, there are supply chain strategies you can implement to increase your business’s efficiency and flexibility.  

Implement these seven supply chain strategies to optimize your business:

1. Determine Your Inventory

While this may seem obvious, the first step in supply chain management is understanding the types of inventory you’ll keep. This is important to the success and profitability of your business. You should do your research and trust your insights to understand your customers best. What kinds of products are customers asking for, and what have they purchased lots of in the past? With these answers, you can hone in on what you have to have on hand and figure out what might sell the best.   If you’re starting out, a good business strategy is to start with sourcing a simple variety of offerings, then build out over time.  

2. Predict Demand

When sourcing products, it’s essential to ensure you have what you need in stock so that you can meet customer demands. To accomplish this demand forecasting, you want to analyze the sales of each of your products and use this data to help with decision-making about replenishing the right amount of stock. As in, you want to avoid over- or under-buying inventory, both of which aren't great for your business’s bottom line.

How do you do this, you ask? Well, you can use software, but a simple spreadsheet may suffice if your business is still fairly small. As your business grows, consider implementing a more advanced system that will work with your business’s needs.  

3. Create a Purchase Plan

One of the worst things that can happen to new and growing businesses is running out of stock, especially when you aren’t expecting it. Not having stock on hand when there is customer demand will disappoint your community and potentially harm your brand or reputation, and no small business owner wants that! These types of disasters can happen with poor supply chain management.

But there is one key way to prevent stockouts! Creating a purchase plan can help with forecasting, and it can increase profitability. You should be able to quickly see what you have and when you can expect to receive shipments from your suppliers. Having this insight will allow you to order enough to make up for any potential gaps.  

4. Track Your Raw Materials

Understanding where your inventory is at all times is a crucial step in the procurement of goods. Tracking your sourcing orders throughout the supply chain network will ensure you’re on top of inventory in case there are delays or your shipment arrives damaged. It’s best to automate tracking as much as possible, or at least put a system in place where everyone involved in inventory can access this information.

This will help with the optimization of your supply chain. In a nutshell: know where your products are so you can plan for crisis decision-making in a timely manner.  

5. Figure How Much You Have in Inventory

Once you have your inventory, the next step in supply chain management is knowing exactly what and how much you have. Businesses either track inventory themselves or use a third-party logistics provider, or 3PL. Either option has its pros and cons, so it’s best to decide ahead of time what will suit your business needs best by forecasting your clients’ needs.  In general, unless you or someone in your company has experience in warehouse management, it may be better to outsource. A 3PL can help with both tracking and fulfillment, leaving you to focus on other, more important aspects of your business such as marketing and product creation.  

6. Fulfill Orders

This step is the fun part: getting products into your customers’ hands. Sales are the lifeline of any business!  When it comes to fulfilling orders, your business needs to manage orders, shipping, and logistics. There is plenty of optimization software for all kinds of businesses and budgets, though make sure you have all the features you need. When a customer places an order, you want to make sure you have the inventory available and allocated to sales. Plus, you want a system that will notify you when inventory is running low.

As for shipping and logistics, you’ll want to have an efficient system to pack and ship orders. Plus, you’ll need a way for you and your customers to track the status of their shipment. You want the experience from ordering, packaging, shipping, to delivery to be flawless — this process is your customers’ primary interaction with your brand.  

7. Track Your Customers’ Orders

Understanding exactly where your inventory is on its way to your customer allows you to communicate with them more effectively. For instance, if you’re selling an item that’s popular for the holiday season, communicating when inventory will arrive on your end lets your customers know you’re doing what you can, therefore exhibiting great customer service. When tracking inventory, get as specific and as in-real-time as possible. Is it in the warehouse, stuck at customs, or, hopefully, out for delivery? Customer satisfaction will skyrocket with this kind of communication.

When it comes to growing your small business, taking it one step at a time will ensure you’re on top of what needs to get done. Whether you manage the entire supply chain process yourself or outsource some of it, be intentional about how much inventory you want to source, and plan on how you’ll finance it. Planning well ahead of time and following these supply chain strategies for optimization will ensure your brand is as successful as it can be!

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