Business leaders are always looking for ways to upgrade their supply chains. No matter how hard they try to maintain their process, there is always room for improvement. Sometimes, people benefit from learning what they should not do, just as much as what they should. With that in mind, read on to explore some of the most common supply chain mistakes businesses should avoid.
Choosing Too Many Vendors
Brand-new businesses can easily make the fatal mistake of choosing too many vendors to sell their products. It makes sense to put your products on as many shelves as possible, but doing so for an untested business could mean a poor return on investment if those products never get off the shelves. Businesses should start small with only one or two companies before they expand.
Poor Cost Management Strategies
Another of the common supply chain mistakes businesses should avoid involves determinantal cost management decisions. Although most businesses strive to reduce expenses, many fail to do so appropriately. For instance, they may introduce new technology to bring down costs but fail to consider the high price of maintaining that new equipment.
You can successfully reduce expenses by minimizing the number of stages in the supply chain. For example, you’ll save money on storage if you immediately send items to retailers instead of housing boxes for months in a rented space.
Failing To Prepare for Unexpected Changes
Businesses working on a global scale have no way of predicting every unexpected influence that could significantly impact their supply chain. COVID-19 is a perfect example. Companies that did not have a risk management strategy for that level of disruption fell behind the better-prepared ones.
One attribute all great supply chains have in common is that they’re flexible. They create comprehensive risk management plans that cover every aspect of a disruption. Among other elements, a good plan should lay out which parts of the business are expendable in the event of a crisis and how to handle communication with customers.
Bad Customer Experiences
A company lives and dies based on how customers view them. Every interaction with a customer is a chance to deepen ties or create division. Therefore, all members of your customer service team must have the proper training to be as cordial as possible. They should be authorized to give out replacements and refunds without hesitation or too much red tape.