A small mistake in supply chain logistics can spell out disaster for your business. Learn about the most common mistakes and how to avoid them.
Do you have supply chain woes? That isn’t surprising. Getting your supply chain right isn’t easy and takes a lot of work.
But getting your supply chain optimized is worth the effort. In fact, companies that optimize on average see 15% lower costs than usual.
Luckily, there are several common mistakes you can watch out for to prevent problems and keep things running smoothly. This post will tell you what you need to know.
Keep reading to learn about five of the common supply chain logistics mistakes you need to avoid.
1. Putting Spend Before Function
Yes, running a business is expensive. But that doesn’t mean you should quantify everything you do by cost. You get what you pay for in most cases, so going for the lowest cost option isn’t the right choice all the time.
Before spending money, make sure that the companies you work with can give you both a reasonable price and excellent service. In the long run, paying a little more upfront can save you headaches and money in the long-term.
2. Reactive Management
When things are good, they’re really good. The problem is, this can lead to people starting to take things easy. Don’t do this.
Even when things are going well, your organization should be on the lookout for any problems coming in the future. Doing this will let you get ahead of issues and fix them before they become serious. Don’t wait until a crisis happens.
3. Lack of Inventory Planning
It’s exciting when you launch a new product. You think it will do well, so you order a large batch of products so you don’t run out.
The problem is, those aren’t guaranteed to sell. When this happens, you’ll have money tied up in inventory. This is money you can’t use in other parts of your business.
Make sure you plan first, so you don’t over or under commit on your inventory.
4. Ethical Sourcing
In today’s environment, companies can’t get away with sourcing products from shady sources anymore. The internet and social media have made it possible for news of this to spread fast, which will damage your company’s reputation.
This makes it more important than ever to have visibility into every part of your supply chain. Make sure your suppliers use ethical production methods at every part of the production process.
5. Lack of Oversight
A supply chain can be complicated. This makes overseeing it a task itself. If companies don’t take the time to develop systems to audit their supply chain, then problems can start to slip through the cracks.
A good way to combat this is through supply chain dashboards. Your dashboards will provide you with a big-picture view of your supply chain. This system can help you get a handle on problems early before they get worse.
Take Supply Chain Logistics Seriously
Your supply chain is one of the backbones of your business. If you don’t pay attention to it and let it run wild, you run the risk of endangering your whole business. Keep track of your supply chain logistics, so things don’t go out of control.
If you’ve got your supply chain taken care of, you can start focusing on marketing your business. Head to our business section to read our latest tips.
