The Great KFC Crisis of 2018 illustrates two principal lessons. First, people won’t take kindly to missing out on their fried chicken fix. Second, supply chain management can be incredibly complicated even for multinational behemoths like Colonel Sanders.
That latter point raises an unsettling question: if a company the size of KFC struggles to keep its supply chain purring, how can small businesses, with far fewer resources, be expected to improve their operations and overcome common inefficiencies?
While enterprise companies benefit from Transportation Management Platforms and teams of logistics specialists, small businesses rarely do. A recent survey looking into trends and habits of small-medium sized importers shows 85 per cent of small businesses lack full visibility into shipment progress, and only 34 per cent report timely deliveries in over 75 per cent of shipments. While new tools and technologies promise to help streamline supply chain logistics, the survey found that most small businesses still use spreadsheets to manage shipments.
Despite these challenges, small-business owners can still leverage their agile size, as well as some solid planning, to bring order and efficiency to their supply chain processes.
Be agile
Herein lies one of small businesses’ greatest advantages over global companies: start-ups and small businesses can often play agility to their advantage, pushing through decisions while large companies are still floundering with paperwork. With fewer cooks in the kitchen, small businesses can execute rapid decision-making around service-level agreements, source more flexibly, and use different platforms and vendors.If you’re a small business and you hear about disruptions at one port, just change routes. Found another forwarder with better prices? Switch without getting encumbered by vendor validation by a compliance department.Entrepreneurs should wield the agility sword whenever possible.
Know the calendar
Prior planning prevents poor performance, and planning around seasonal trends as well as smaller peaks can prevent unnecessary roadblocks in the shipment process. Businesses can count on lower available freight capacity (and higher prices) leading up to the Chinese New Year and the holiday season, as well as the time around electronic product releases in September. Even on a monthly cadence, ocean freight prices trend to drop during the course of the month. So if you’re shipments can wait a couple of days, it’s usually best to hold off. Planning around known cyclical trends staves off 11th-hour scrambling, freeing up time to concentrate on other facets of the business.
Build supplier relationships
A solid manufacturer is an invaluable resource for entrepreneurs, as is a trustworthy logistics provider. Business owners should foster supplier relationships built on regular, frank communication. Asking the right questions at the right moment removes the guesswork and ensures transparency. You don’t need to micromanage—but you can’t afford to be in the dark, either.
Choose the shipping mode ala mode
Getting left without inventory is a death sentence for a small business. When in a pickle, many are forced to opt for expensive air freight shipping. In general, air is ideal for small or urgent shipments, while shipping by sea is far more affordable. But break free of the notion that it’s not all or nothing—feel free to mix and match. Business owners should seek out platforms that allow them to seamlessly compare the full range of quotes and options for a shipment. When there’s an urgent demand for inventory, ship it by air…but only ship whatever inventory is critical, while letting the rest take a more luxurious ocean cruise.
Clarifying freight processes and procedures will afford small businesses greater visibility of their shipments, improve supplier relationships, save costs, and lead to timelier shipments. Colonel Sanders, take note.
Eytan Buchman, VP – Marketing, Freightos
