By Deborah Flomberg
So you’ve decided to take the plunge. You’re opening your own business with dreams of national distribution and big numbers. It’s a lofty goal, but it’s one that isn’t totally out of your reach, provided you’re smart and you know how to work with supply chain and logistics management. It’s one of those skills that isn’t taught much at the college level, so the only way in which to learn these skills is to dive headfirst into the business itself, but you can learn a lot from those that have been there before you.
Understand The Bullwhip Effect
The Bullwhip Effect is something that can (and most likely does) affect you. It’s a phenomenon first noted by MIT systems scientist Jay Forrester, who noted that inventory swings in larger waves in response to customer demands, much like the ripple of a whip in action. This means that suppliers of materials are seeing large variations in response to changing customer orders and business owners are learning to keep an inventory of “safety stock” to allow for swings in demand. The build of a safety stock is something that many small business owners need to address, so understanding the Bullwhip Effect and how it may impact your supply chain management is crucial to your success.
Cut Costs Where You Can
If you’re mailing anything on a regular basis, there may be a lot of room to find ways to save money. You’ll want to look into all options to keep your distribution management organized and effective while you find ways to cut costs. There may be some savings in going with standard post office rates, or you might find more luck partnering with another organization or shipping items with other businesses. FedEx, UPS or one of the other mailing services may be even better for you, and there may be bulk rate savings or other deals you can find for your business. Just don’t stop at the first solution you find, take the time to look for those cost-cutting options, and you’ll find that will help you a great deal in the long run.
So you work in an organization that delivers across the country, but you need to find ways to cut some costs. Well, if you’re shipping in your own trucks from state to state, you’ll have a big empty truck coming back your way after it has made its last delivery. Why not partner with other businesses in need of delivery space? Then you can use your truck in both directions, keeping costs low while your drivers continue to save your company money. These are the types of outside-the-box thinking you’ll want to do when you come up with ways to keep your supply chain moving while saving money in each direction.
Make The Packaging Work
The packaging is also part of your customer experience. Not only do you want to make sure your customers have a great experience while unpacking your product, you want to ensure each item is easily mailed and keeps your shipping costs as low as possible. Look into all the different packaging options and don’t be afraid to think creatively about traditional packaging and what that normally looks like. Something small, easy to ship and highly personalized will go a long way to helping your customers feel special and important to your small business.