How to Deal with Supply Chain Issues in an Internet Business
With the rise of eCommerce, supply chain management has become a lot harder. There are so many different partners, consumer expectations and logistical issues to deal with. Supply chain managers are being forced to use data and analytics tools to see where the bottlenecks are and find solutions. The challenges are magnified if you run an online business. When a combination of international and local partners is in the picture, things can get very complicated. Below, we will look at some common supply chain issues and offer some suggestions on how to deal with them.
This has to be one of the biggest headaches for an international business. Most customers do not understand product sourcing and therefore want their products delivered as soon as they are ordered. An internet business can deal with this in a few ways:
- Talk constantly with your customers to let them know about the state of their orders
- Supply them with a way to track their orders
- Indicate on your website how long it will take for products to reach them
- If you do international sourcing, let your customers know that their delivery will take a little longer.
Delays in Supply
Most online businesses source their products internationally. Because of this, delays in supply are a constant nightmare for these business owners. If you are constantly in a situation where you run out of inventory before the next shipment comes, there are a few things that you could do:
- Order larger consignments. Ordering larger consignments ensures that you have time to restock before your initial inventory runs out. A bonus is that the larger the quantity you buy, the cheaper it will be
- Hire an inventory manager. An inventory manager has the skills to read the market and order items for you if they think there will be a spike in demand that will lead to your business running out of stock. Click here to learn how to study an online supply chain management degree and become a supply chain manager yourself so you do not have to hire an extra employee.
- Warehousing. This is an additional cost to any business but it is worth it. A warehouse allows you to stock a bigger inventory and allows you to always have items in stock. Go through your business finances to see if you can afford it because warehousing can be costly.
Volatility and Complexity
Volatility can create unintended issues in your supply chain. The type of volatility you should be most concerned about is political volatility in countries you source from. If there is volatility in your supply chain, you could experience:
- Pressure on your business’s finances due to lower sales
- Delays in inventory delivery due to slower shipment clearance
- An increase in the cost of products due to additional tariffs and unseen costs
- A total breakdown of your business if your competitors who source from stable regions keep selling when you are not.
If you experience this issue, the best thing to do is to change suppliers. Find suppliers in stable countries. If you are in a volatile region, the sad thing is that there is nothing you can do.
This is a problem faced mostly by new internet businesses. That said, some established businesses do bet low-quality products from time to time. This is a manufacturing and quality control issue. Here is what you can do:
- When adding new products to your store, ensure that you get a sample first. This will allow you to see the quality of the product before you put in a bulk order
- Change manufacturers. If you outsource the manufacturing of your products and they are often of low quality, you should consider changing manufacturers. If you do, ensure that you get a sample from them too before stocking their products in your store.
Rising Transportation Costs
The cost of goods and services is always going up. The biggest area where you might see a hit is in the transportation of your products to your warehouse or your customers. Here, you can cut costs by:
- Changing your logistics company. It is always a good idea to look around before you settle on a logistics company. This is so that you know what your transportation costs will be beforehand.
- Order in bulk. When you order in bulk, your transportation cost per product goes down. You also do not order products as often which means you will cut down your transport costs in this way.
There are lots of issues to deal with in any supply chain. Some are common and some may be unique to you due to a combination of manufacturers, suppliers, logistics partners and your choice of a warehouse. Finding a solution to all of them requires careful consideration and solutions that could be unique to just your business.