David Staziker on developing your supply chain
To make the most of targeting international markets profitably,
you should really review the cost-effectiveness of the supply side
of your business. Investing in your supply chain can have a
significant long-term impact on your bottom line and there are many
practical steps you can take to increase efficiency, improve
quality and reduce your costs.
What does it all cost?
Do you really understand your cost base, including any niggling
- Could you reduce your storage and transport costs, for
- Could you procure on a sale-or-return basis, perhaps or
maximise your credit terms?
- What credit insurance could your suppliers obtain for you?
- Negotiate hard to get the right quality and service levels from
suppliers - you may be pleasantly surprised with what you can
Improve quality and reduce costs
Do you purchase the materials, components and services you need
from the most cost-effective supplier? Have you ever considered
international sourcing or production?
Internationalising your supply chain could help improve your
product/service quality and reduce production costs, but you need
to think carefully about the associated risks. If you’re buying
bulk, think about your hedging strategy.
Does your business have the technological advantage?
Using your IT systems efficiently to manage your supply chain
can pay significant dividends, enabling you to procure and deliver
your products quicker and more cost effectively. For example, your
web site shouldn’t only be used by your customers – you could
develop it so your suppliers can understand your likely future
Make the most of what you’ve got, but have a plan B
Really understand your product’s USPs and structure your supply
chain appropriately so you procure non-core components/services
effectively, but keep your key technologies in-house to prevent
What’s your plan B? Ensure you have a minimum of two sources of
supply so you can cope if something happens to one supplier?