In today’s global market, an efficient, resilient, and adaptable supply chain strategy can help small businesses ensure reliable delivery while keeping costs low.

Supply chain management is defined by the Association of Supply Chain Management (ASCM) Supply Chain Dictionary as “the design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand, and measuring performance globally.”

An effective supply chain strategy connects each production stage to ensure products are delivered accurately and on time, while working to reduce operational costs, prevent delays, and ensure high-quality service.

Supply chain management aims to integrate suppliers, manufacturers, and distributors to create a coordinated, strategic process. Suppliers provide the initial resources, manufacturers transform these resources into finished products, and distributors deliver them to customers or retailers.

Creating an effective supply chain relies – in part – on strategically aligning suppliers, manufacturers, and distributors to ensure all supply chain activities cohesively work together to improve operational efficiency and, ultimately, customer satisfaction.

For example, when a supplier faces delays, manufacturers and distributors should work to adjust timelines accordingly to minimize customer impact. 

Globalization has expanded supply chains worldwide, but it has also made companies dependent on distant suppliers, potentially creating delays when disruptions occur. The COVID-19 pandemic revealed these vulnerabilities, with lockdowns and labor shortages contributing to production and shipping delays.

Global conflicts and nationalism may further impact supply chains by restricting trade and prioritizing domestic resources. In addition, extreme weather events, from hurricanes to wildfires, have the potential to disrupt routes and production sites.

As these challenges grow, a resilient and adaptable supply chain management process will take on even more importance in supporting long-term business success.  

Each phase of the supply chain management process can play a role in helping small businesses control costs, improve productivity, and deliver quality products to customers.

•    Planning:

Demand forecasting, capacity planning, and resource allocation are conducted to balance supply with demand. Small businesses can use historical data and market trends to estimate future sales, and capacity planning to ensure they can meet this demand with available resources.

•    Sourcing:

Sourcing involves selecting reliable suppliers, negotiating contracts, and conducting quality assessments to maintain a steady supply of materials.

•    Manufacturing:

Production scheduling, quality control, and efficiency optimization may be particularly important for small businesses that need to reduce waste and increase productivity.

•    Delivery:

Delivery manages logistics and distribution to move products from the business to the customer. Last-mile delivery, the final stage of the delivery process, brings products directly to the customer’s door. Real-time tracking and close coordination with logistics partners ensure prompt and accurate deliveries. FedEx offers small businesses real-time tracking as well as flexible, reliable last-mile solutions that can meet different requirements – such as various delivery times and package weights.

•    Returns:

Returns cover the reverse logistics of handling returned items, including product assessment, restocking, and recycling. Product assessment helps determine the condition of returned items, and effective reverse logistics ensures that returns are processed efficiently. This approach helps to enhance customer satisfaction, reduce inventory waste, and recover value from returned products where possible, all of which are important for small businesses.

Through good supply chain management, a small business may minimize its environmental impact. Sustainability in supply chain management focuses on minimizing environmental impacts while working to improve resource efficiency. Sustainable practices aim to address growing consumer demand for responsible products, contributing to brand loyalty while aligning with global sustainability goals.

• Fuel-efficient transportation involves selecting carriers that optimize routes, reduce emissions, and utilize vehicles with lower fuel consumption. For example, FedEx plans to convert 50% of our global pickup and delivery vehicle purchases to electric by 2025, increasing to 100% by 2030.

• Sustainable sourcing involves businesses choosing suppliers that adhere to environmentally responsible methods, including resource conservation and ethical labor standards.

• Minimal or biodegradable packaging is another impactful strategy, as it reduces waste that would otherwise end up in landfills.

Small businesses can benefit from various supply chain management strategies that help optimize operations, respond to customer demands, and stay competitive. Some approaches include lean, agile, technology-driven, and dropshipping supply chain management strategies. Each supply chain strategy offers tools to streamline processes, enhance flexibility, and control costs.

1. Lean supply chain management is a strategic approach focused on reducing waste, improving process flow, and maximizing value at every stage in the supply chain. It emphasizes efficiency improvements such as batch ordering and minimizing packaging, and is ideal for businesses with predictable demand such as automotive and electronics manufactures.
2. Agile supply chain management is a flexible approach that enables small businesses to respond quickly to changing customer demands and shifting market conditions. It emphasizes collaborative supplier relationships and collaborative forecasting, and is ideal for industries like fashion, electronics, or any sector with rapidly changing consumer preferences.
3. Technology-driven supply chain management integrates digital tools to increase visibility, control, and decision-making capabilities across the supply chain. It has been used in industries like pharmaceuticals and agriculture where real-time visibility and data analytics can lead to improved decision-making, efficiency and resilience.
4. Dropshipping allows small businesses to sell products without holding inventory, as suppliers handle shipping directly to customers. This approach eliminates the need for warehousing, reduces fulfillment costs, and limits inventory risk. It is often used by e-commerce businesses.

Technology plays an important role in supply chain management, particularly for small businesses aiming to improve productivity and accuracy with limited resources. Automation tools like affordable inventory tracking software, order automation systems, and mobile barcode scanners help streamline operations and reduce manual errors.

For example, mobile barcode scanners provide quick, accurate inventory updates and help small businesses to maintain real-time stock records with minimal effort. Likewise, order automation reduces repetitive tasks to save time and improve the accuracy of order details.

Real-time tracking is another potentially valuable advancement for small businesses. Apps offering real-time tracking help companies keep their customers informed about shipment status, which may boost customer satisfaction.

For example, small businesses can use FedEx Surround to gain next-level control and visibility of shipments with near real-time data and predictive insights to support proactive decision-making. 

Blockchain and AI are influencing supply chain management by increasing transparency and predictive capabilities.

Blockchain tools track products across each supply chain stage, with the aim to improve accountability and ensure authenticity.

AI-driven inventory apps – such as ClearAI and ShipHero – analyze trends to predict demand and automate restocking, potentially reducing the risk of shortages. 

The Internet of Things (IoT) is contributing to supply chain efficiencies through real-time monitoring with IoT tracking devices like GPS tags and temperature sensors. This works to improve inventory visibility, minimizes losses, and gives small businesses the ability to respond immediately to shipment issues so more customers receive items in optimal condition.

In today’s dynamic market, an optimized supply chain helps support businesses to respond quickly to demand and build resilience against supply chain disruptions to maintain a competitive edge.

For small businesses with limited resources, technology-driven supply chain management may offer better visibility and control across the supply chain. This helps align operations with customer expectations and demand which is important for the growth of any small business.