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How the Supply Chain Affects Your Business

Business accounting concept, Business man using calculator with computer laptop, budget and loan paper in office.

One foundational component of any business is the supply chain. Creating and managing a supply chain for your company will be integral to keeping operations running smoothly, and that makes doing so an imperative for remaining in business. Here’s what you need to know.

Manufacturing

The first step in any supply chain is manufacturing. This is the point of origin for many commercial products and, notably, mechanical parts. For example, manufacturers might build couplings Mesquite TX for use by other businesses to manufacture additional, more complete products, or they be responsible for the final product itself. Manufacturers will deal primarily with distributors, rather than dealing with retailers and other companies that interact directly with consumers. However, a retailer may buy direct from a manufacturer if they see fit, a measure that can be tremendously helpful for smaller businesses looking to save some money to stay afloat. 

Distribution

The odds are that you’ll be interacting primarily with a distributor, instead of a manufacturer. This is because distributors specialize in procuring products from manufacturers and adding value to them before passing them on to retailers, thereby providing better products in a more convenient package. Wholesalers are distributors that specialize in buying and selling products in bulk, making them essential partners for supermarkets, for example. It’s important to note that businesses don’t always depend on a single distributor, either.

Management

A successful business starts with effective supply chain management. Finding the right distributors, wholesalers, or even manufacturers is an essential first step. Prioritize lower price points, as needed, but be careful not to sacrifice the quality of the products and services received in the process. It’s also important to manage your inventory and communicate with your distributors to ensure you always have what you need before running out of product. Failing to keep the essentials stocked will result in the loss of potential revenue or even kickstart the road to bankruptcy for vulnerable small businesses.

Eddie Nobles

The author Eddie Nobles