How Small Businesses Can Overcome Supply Chain Challenges

COVID undoubtedly caused a stir in the world, generating significant changes in everything we did – how we worked, played, ate, and purchased. We’re still reeling from the impacts two years later. This is especially true if you’re a seller who is still working out how to deal with supply chain issues. By the end of 2021, 61% of small firms said that the pandemic had affected their supply networks, with 63% reporting that they had to change their supply chains in the previous six months. As a result, over half of these business owners reported that disruptions made it difficult to keep up with demand.

There are two major reasons for this: rising consumer spending and labour shortages, particularly in transportation and logistics. These two factors combined to cause significant delays throughout the supply chain, with small business retail bearing the brunt of the challenges, with 78% of surveyed small retail business owners reporting that the pandemic disrupted their supply chain and 61% reporting that these disruptions made it difficult to meet customer demand. Smaller firms, in contrast to larger organisations, which may have many supply streams and divisions to source new materials, frequently struggle to pivot to a new supplier or lack the means to consistently source new products and materials.

Shipping delays have created a plethora of supply chain issues for manufacturers, distributors, retailers, and e-commerce sites. It can be difficult for small businesses, whether you run a retail shop or an e-commerce store, to keep popular items stocked and cope with eager customers. Let’s look at some strategies for preparing for these issues while keeping your business functioning smoothly.

1. Keep Track of Your Inventory

Even in the best of circumstances, it is critical to keep track of your inventory. With regular supply chain shortfalls, it’s important to know what you have on hand and what has to be replenished. You don’t want to be caught off guard, running out of popular items and discovering that restocking them is tough.

2. Establish More Supplier Relationships

If your existing suppliers are simply not meeting your expectations, it is time to consider alternatives, even if only temporarily. Because these challenges are prevalent across industries, suppliers are already accustomed to establishing new partnerships and may be prepared to be flexible with contracts and terms if they do not want to make permanent changes. Look for trustworthy and dependable supplier providers that can provide what you require. It’s also a good idea to look near your location to avoid delivery and shipping delays caused by distance.

3. Whenever Possible, Increase Your Inventory

Investing in a large amount of merchandise is not always possible when you have little money. In addition to budgetary constraints, you must consider time, labour and physical space. There are several ways to grow your inventory:

• Buy as much of a popular product as possible when it becomes available.
• Keep an eye out for significantly reduced items to stock up on.
• Look for funding to buy more inventory.
• Consider expanding your space or hiring storage space.
• Consider outsourcing storage, packing and shipment.
• Implement Third-Party Logistics (3PL) to help with supply chain issues.

4. Make Product Changes

There’s a risk you sell some products that have flaws that changing suppliers won’t fix. In this instance, you may need to consider changing your products or finding alternate products to market in their stead. If your financial situation improves, you may always sell your original products again. Meanwhile, you may be able to make up for some of the earlier missed sales.

5. Improve Customer Service

Supply chain issues are a pain for any organisation, but they can cause trouble and dissatisfaction for your consumers. The typical client may not comprehend or care about the problems occurring behind the scenes. They just know they’re not receiving what they desire. That means you must be on top of your customer service game. Be open and honest with them about current and anticipated challenges, and tell them that you are doing everything possible to meet their needs.

6. Stay Up to Date

While supply chain disruptions can happen anytime, they are often foreseeable. Depending on your area and industry, the situation may be very different. Politics, economic issues and meteorological conditions can all impact supply chains. Keep up with industry changes and news that affect your products. If you anticipate a possible shortage, you can take the necessary precautions, such as selecting alternate products to stock. Of course, you won’t always be able to forecast every future upheaval. You can, however, avoid certain complications by staying up to date on the latest changes.

7. Begin Preparing Customers For Upcoming Changes

Use your email newsletter to remind your customers about last year’s shopping concerns and to inform them about your plans for this year’s shopping season. Through blog pieces and videos, provide behind-the-scenes peeks into your operation. This may inspire shoppers to begin purchasing early or, at the very least, not wait until the last minute. Customers who waited too long should now understand why the things they ordered on December 21 did not arrive on time.

8. Offer Free Shipping

It won’t make your things arrive any faster, but if customers believe they’ll receive free delivery, they’ll be much more patient with delays beyond your control. Of course, shipping expenses can be factored into the pricing. Most people expect their internet sellers to do the same thing. But there’s something about paying $0 postage that attracts many people.

9. Offer Buy Online, Pick Up In-Store (BOPIS) Options

BOPIS option is when a customer can order an item online and then drive to their local store to pick it up. Many big-box businesses will provide this option, and if you have a physical location, consider adding it to your sales toolset. If you’re unsure, keep in mind that roughly one-fifth of shoppers will avoid a store that does not provide a BOPIS option. This represents 20% of your prospective client base.

10. Manage Your Supply Chain With Efficient Tools

Using the most recent automation tools will assist you in staying on top of your supply chain and planning properly. Supply chain management (SCM) software is currently utilised primarily by larger firms that may have several departments, locations and specialities. On the other hand, smaller organisations can benefit from SCM, especially when supply chain issues are widespread. This software assists you in tracking inventory, managing delivery and staying up to date on which things are moving the fastest.

Final Thoughts

For the foreseeable future, we may face widespread supply chain issues. Most economists anticipate they will persist in the second half of 2022 before improving early next year. The good news is that many customers already know this is a widespread problem, so they may be more understanding if you can’t provide them with what they want as quickly as they’d like. On the one hand, several challenges, such as climate change and political instability worldwide, may continue to cause disruptions. On the other side, new advancements such as blockchain supply chain management may offer innovative solutions in the near future. Small businesses must do all possible to prepare for any eventuality. This entails being proactive, examining your data, seeking alternate suppliers and products and keeping your customers updated. With these tips, your company’s reputation may not suffer as much as it would if such difficulties occurred before the pandemic.