Sunday, November 3, 2013

Supply Chain Management : Acquiring Suppliers and Streamlining the Supply Chain

BEFORE READING THIS WATCH THIS VIDEO Click Here!         An important part for any business is the acquisition of suppliers and contractors ; they help to maintain a business by supplying stock, supplies and services.  There are a few important factors to consider while selecting suppliers such as ; shipping costs and time, duties and other customs taxes, as well as what the supply requirements of the business are.

Product Oriented Business

        Businesses that have a high amount of product sales need regular replenishment from suppliers.  Depending on what the product is; it may take a number of suppliers for one finished good, or perhaps the good is completed by one supplier.  These can be acquired through speaking with business customers and other similar businesses in the industry, as well as researching on the internet and industry databases.
       Shipping costs will increase depending on the size of the product, example; a small product with high volume minimizes shipping costs per unit, so it can be purchased from a greater distance, whereas a large product will have a high shipping cost per unit so it would be wise to have it made close by.
       Duties and customs taxes are different for each type of good; this information can be found at customs websites for each country.  If a business is supplied domestically customs are not an issue for supply-side, but a business being supplied over foreign borders should be concerned with the duty levy rates for their goods.
       The supply requirements of a business are important to determine which suppliers can meet volume and production time requirements for the product.  Some suppliers specialize in short run time for small quantities of product, whereas others have a longer time requirement and production minimums.  With multiple pieces from different suppliers for a product to be completed, it is important to streamline their delivery for minimum wait times and stocking costs.  Choosing the mix of suppliers is unique to each business, with similarities in industries, but differences for each stage the business is at.
      A good resource for sourcing supplies is global trade websites such as TradeKey (http://tradekey.com) and Alibaba (http://alibaba.net) ; browsing these types of sites can provide information on global market prices at different quantities, displaying possibilities for future growth and production.

Service Oriented Business

      Businesses which offer a service will likely not require as many suppliers to complete a product which they sell.  The difference is service oriented businesses may require a greater amount of outsourcing for administration purposes and other departments which can be easily outsourced to third party contractors (ie. web programming, advertising and service design)  Also, not unlike a product oriented business, these service firms require marketing materials for promotion.
     These third party contractors and marketing materials can usually be found locally, as well as online.  Search for marketing materials in a search engine, also a good resource for sourcing contractors is E-Lance ; (http://elance.com) it is a resource for freelancers and businesses to connect from all over the world, any type of business service can be found here.

Streamlining the Supply and Value Chain

    Optimizing workflows and supply chains can maximize value in a business by lowering costs due to stagnant inventory and disorganization.  Having supplies and services delivered in a timely and complete manner can increase the efficiency and value of a business; by acquiring the right suppliers and contractors a business can run effectively with little disturbance.  The correct mix can be found be spending time researching different resources and trying different combinations and practices.  Also by adhering to industry standards, which can be learned in business practice, interacting with suppliers becomes more simple as a business becomes more similar to the norm in ordering and logistics.  There is a lot of potential value in an established business, it can be propelled further with a solid supply chain and effective outsourcing.

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