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5 Common Mistakes Supply Chain Companies Make and How to Avoid Them

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Running a successful business is hard work, so you have to make sure you’re supported by a solid supply chain. The companies in this network can help you achieve a new level of success or inhibit the growth of your organization.

Knowledge is power. Take a look at five mistakes commonly made by supply companies and what you can do better.

  1. Setting Minimum Order Quotas

Many companies require customers to reach a minimum purchase to make a sale, but this isn’t necessarily the best strategy. Providing better customer service could generate more business in the long term, which would offset the any slightly higher costs associated with smaller orders. Every company has a different breakeven number, so analyze data to see how much your organization can swing.

  1. Failing to Create a Robust Supplier Network

Instead of constantly checking to make sure the most efficient big-picture strategy is placed, managers often make the mistake of focusing on each individual component. All it takes is a glitch from one supplier to throw the entire network off-base, so it’s important to always be working to ensure the most efficient overarching strategy is in place. This might mean choosing facilities close to one another or having backup suppliers on hand in case there’s a problem with a primary supplier.

  1. Bypassing Supplier Reviews

Companies frequently negotiate the price with their supplier, but most don’t take the time to audit their performance. A supplier with outdated, inefficient processes and procedures is largely ineffective, so even with a good deal on price, the relationship isn’t beneficial. It’s much wiser to work with the suppliers to create a robust set of best practices because, in the long run, this will add the most to your bottom line.

  1. Choosing Low-Cost Suppliers

Savvy business leaders understand the importance of keeping costs low, but sometimes inexpensive suppliers in countries like India and Vietnam aren’t worth the effort. When working with an overseas supplier, significant lead time is needed and there’s not a lot of room for flexibility. It’s important to consider the cost of the total supplier relationship, instead of becoming distracted by a low upfront cost.

  1. Focusing Solely on Price

Relationships are crucial to a successful business, but many companies are more concerned with their bottom line than who they’re actually working with. You can’t put a price on quality. If a supply chain partner is charging a much lower price than every competitor, something is likely lacking. Opting to stay with a reasonably-priced affiliate you know and trust is typically wiser than chasing the lowest price tag.

Finding the right engineering, maintenance, and operations management professionals for your team isn’t easy, so allow MAC Incorporated to assist. Our niche-based staffing and recruiting firm is here for you. Contact us today to find out how we can help you hire better.

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