you-are-a-supply-chain-business

You are a Supply Chain Business

2 minute read

 

Small businesses define themselves by what they sell. Ask, and they will tell you:

"We sell truck tires."

"I have an e-commerce store for my jewelry."

If a small business buys items to supply their market and sells them (after assembly or not) to other companies, then it is a supply chain business.  Not thinking of a B2B oriented business as part of a global industry supply chain is a big mistake. Small businesses in America are big business when taken collectively, with firms comprised of one owner/operator up to 20 workers making up 97 percent of all companies in the United States. Treating a small business like a big business means not only planning for rough times but planning to support growth.

A lot of people tell small business owners to "fake it 'til you make it." That's a way to sell yourself short and tick off your customer base. If a small business is open and the payroll is being made then congratulations - you've made it! Now stop faking it and start planning to make more of it.

Inventory Control

Controlling inventory and its associated costs is a massive part of supply chain management. Why? Inventory once paid for, received, and shelved, can end up being a considerable expense. In fact, if a small business owner feels that they’re barely above water despite the profit on the books, it’s time to look at the cost of carrying inventoryand how it punches a hole in the profits. Your actual cost of goods needs to factor in the following KPIs:

 

  • Cost of goods
  • Cost of warehouse space
  • Cost of storage including shelving, bins, materials handling equipment etc
  • Cost of employee service from receiving to putting it on a truck
  • Taxes
  • Insurance
  • Depreciation
  • Shrinkage
     
Of all of the expenses on that list, there are ways to trim some, but others such as depreciation and taxes are inevitable. One of the best ways to control inventory is through the use of WMS (warehouse management software) that includes barcoding and live inventory. The other is to reclaim minutes and hours from employee servicing using a put-to-light system from Voodoo Robotics. 
 
2018 Buyer's Guide to Pick-by-Light 7