Small business success: tips for driving growth and optimization
According to the SBA Office of Advocacy, approximately 33 million small businesses exist in the United States, accounting for nearly half of the private-sector workforce. These businesses aren’t just mom-and-pop shops. They can, depending on the industry, have multi-million-dollar balance sheets and thousands of employees.
But no matter how big a small business is, they all can face transportation challenges that larger companies don’t. Learn what these challenges are and how to overcome obstacles, and get tips for improving your small business’s overall supply chain.
Challenges small businesses face and how to overcome them
While small and large businesses share some common challenges, some may affect the former more often. These include:
Limited shipping volumes
Smaller businesses typically have lower shipping volumes than enterprises, which may increase transportation costs. Without large volumes, you may not qualify for discounted rates and won’t have the negotiating power that a big company has.
But that doesn’t mean you’re destined to always pay more. Truckload and LTL rates can generally be negotiated ahead of time based on factors other than freight volume. Other elements rates are based on include your freight characteristics (such as size, weight, and fragility) and payment terms. You can also partner with a transportation broker who can use collective buying power to negotiate better rates.
Lack of infrastructure
Shipping becomes difficult if your company lacks proper warehouse space or distribution centers. This may make coordinating shipments, managing inventory and minimizing transit time difficult.
Try utilizing third-party fulfillment centers or warehouses to solve this problem. These fulfillment centers can offer discounted shipping rates, storage or processing services and can act as an extension of your business.
Fragmented supply chain
Small businesses often have fragmented supply chains due to geographic constraints and a reliance on multiple suppliers. Limited access to transportation providers or certain suppliers may force small businesses to work with local or regional suppliers rather than consolidate their sourcing efforts.
To combat this fragmentation, you may be able to use managed transportation. This will help move your inbound and outbound goods in the most efficient way possible and can often save you money.
4 additional tips for your supply chain
It may seem like an uphill race to compete against your larger counterparts, but you likely have some advantages. Things like your business’ agility in the marketplace and its ability to target specific customers’ needs are pluses that big businesses may not possess.
Here are some tips to follow if you are a small business and are seeking to improve your supply chain:
Use technology to your advantage
Leveraging logistics technologies like inventory and supply chain management systems can streamline your processes. A solid technology plan can help even the playing field with larger competitors by creating more efficiencies and saving you money on warehousing unnecessary goods.
Invest in forecasting
Using historical data, customer insight and market trends to forecast demand is essential to a smooth supply chain. Accurate data to support your manufacturing can help avoid overstocking or understocking your warehouse. This will impact the storage space needed and increase efficiency. Spending less on unnecessary storage can benefit your bottom line.
Learn more about data integration in transportation
Develop supplier relationships
Getting to know your suppliers can help you establish shipping schedules and anticipate any delays. Speaking with your vendors and seeing what their shipping process looks like will also be helpful when shipping to or from their facilities. A good relationship will also come in handy when negotiating your contracts with vendors.
Practice clear communication
Communicating clearly and concisely with your vendors and transportation professionals is essential for success. Express your needs beforehand and anticipate any mishaps along the way. Clear communication about everything from the correct dimensions of shipments to deadlines can save you money and avoid delays.
Opt for ArcBest
We know that the health of your supply chain can often show the health of your overall small business. By partnering with ArcBest for any of your supply chain solutions, efficiencies can be created and your transportation budget can benefit. Contact us today to see how we can best serve your business and improve your current supply chain.