The 4 Questions Your Supply Chain Wants To Ask You

You, small business owner, may be under the impression that you and your supply chain aren’t in a relationship. You might be thinking, “Hey, I’m a small business and don’t really have time to settle down with just one supply chain.” But, let me tell you, your supply chain feels differently. Get your relationship optimization on track, by listening – really listening, for once – to your supply chain.

Because if you’re not ready to commit to your supply chain, you may end up with a boiled rabbit on your stovetop.

1. Why don’t you pay more attention to me? Like Glenn Close in Fatal Attraction, your supply chain won’t be ignored. Your supply chain may not pour acid on the hood of your car, but if you don’t show your supply chain the right kind of attention, you’re going to end up with too much inventory or not enough inventory or customers who want to know where their orders are. Supply chain is a function of time and quantity and cost. You need to understand it from a macro-level and in all its gory details, because time, quantities and costs are too valuable not to have under control. Pay lots of attention to your supply chain (it wants you to) – from your Tier II suppliers, through to your inventory control, to your customer delivery. Or else. If you don't have the time, look into third party shipping services and offload the work to someone who can give it the attention it needs.. 2. How much do I mean to you? You may try to turn the tables on your supply chain and ask it, “That’s not fair. How am I supposed to put a value on our relationship?” If you’re Richard Curtis (rom-com maestro – see Love Actually, Notting Hill, Bridget Jones, etc.), you could say it’s the over $2 billion in box office that your relationship movies have grossed.

But if you’re a small business owner, try valuing your relationship using FIFO, LIFO or a weighted average.

Your accountant, bookkeeper or CFO will let you know which accounting method you need to use to value your inventory – but your COGS is only part of your supply chain’s value. Freight, cost of quality, insurance and other overhead costs can burden a supply chain – and if you can’t tell your supply chain how much it means to you, it’s probably costing you a lot more than you think. 3. I see you looking at other supply chains. How do you think that makes me feel? Explain to your supply chain that you’re not gawking at that other young supply chain with the short lead times and nearly perfect on-time delivery. You’re benchmarking. And how can you appreciate your own supply chain if you don’t take a look at what else is out there? Benchmarking supply chains within your industry and at your size company and within your specific geography is a great way to not only gauge how well your supply chain’s doing – but to also figure out where it can improve. 4. Do these metrics make me look fat? Listen, I think you need to be honest with your supply chain. And – not a lot of people want to admit this – most supply chains could stand to lose a few pounds. Companies tend to over order to make sure they have enough. Or they ship things priority/express/ove ight, because they’re afraid to run out. Or they lose track of the widget-thingies and aren’t sure if they have enough for the next customer order. Or they’re not sure if the next customer order will be for 100 each or 1,000 each or will come at all. Put your supply chain in front of a mirror and show it those metrics. Your supply chain wants to make you happy but it needs you to tell it where to shed that unwanted weight.