To remain successful with a growing customer base, an organization needs to determine how to expand their current supply chain to match their expansion. Simply put, every milestone in growth calls for simplification of logistics. When the complexity of a supply chain increases, the business on the whole takes a hit.
Supply Chain Segmentation
To ensure that you can meet growing demands and commitments, the supply chain segmentation model routes customers with different demands into the appropriate supply chain paths. This first level segregation is done based on an assessment of each customer’s profitability, priorities and pain points. So, if a segment needs a product immediately, and if that is high priority, regardless of cost, you can develop a supply chain path that delivers quickly. Of course, it comes with a higher price tag. Similarly, if someone is willing to wait for the product long enough, you map him to chain path that prioritizes cost first.
New products
Developing through the launch of new products for existing customers or markets will find supply chain challenges. It is difficult to predict sales of a new product because there is no idea how customers would react to it. So, companies try and create a supply chain agile enough to adjust to demand volatility. Agility is achieved by sharing material requirements planning information with suppliers and mitigating risk by avoiding fixed cost investments.
Outsource Modular Product Manufacturing
When you look at computer manufacturing, most components such as hard drives, processors and motherboards are manufactured separately. They are then assembled by the brand name on the final product. So, it becomes less of a strategic differentiator. These companies can focus on their core competencies with this model.
New locations or channels
When you venture into new retail space, examine standard variables such as tax rates or business-friendly regulations. Evaluate supply chain issues that could crop up anytime. Your growth in the new location depends on factors including access to suppliers or customers, disruptions from natural catastrophes or political unrest, time zone(s), state, regional or country regulations, language barriers or cultural differences. Make sure each foreseen issue has a solid backup plan.
Ecommerce Can Deliver Global Reach
Before starting a new brick-and-mortar location, it’s a good idea to test customer base there with e-commerce. Logistics in an ecommerce site is definitely a lot easier than with brick and mortar stores. And in case the customer base is good enough, the organization can come up with a brick and mortar store in that location. Starting the ecommerce site also tell you if the potential of that zone can be tapped with online sales windows alone.
