All organisations rely on strong and dependable supply chains but they’re especially important for SMEs. Smaller firms typically have less clout when compared to larger competitors and, as a result, many have to rely on good faith to access the products and services they need to do business. When the market is performing well, this isn’t such an issue. It’s only when output begins to slow down that SMEs begin to struggle, highlighting the need for a more strategic approach.
Almost every business has wrestled with supply disruption in recent years, though the electronics industry has arguably experienced the worst of it. The raw materials needed to make semiconductors, for example, began to dry up towards the end of 2019 and even today there are still serious supply challenges. The problem has been so bad that even household brands, like Sony and Apple, have had to delay flagship product launches simply because there aren’t enough parts available to continue production.
This situation has tested those working in electronics and forced many in the industry to think differently to remain competitive. In fact, the scale of disruption has been so extensive that it’s fair to say businesses in the sector now have some of the best knowledge for trading during lean periods. With that in mind, here are 5 top tips for SMEs looking to limit disruption where possible by Danni Williams, Sales and Customer Support at Offshore Electronics.
Be flexible
Even major global businesses are currently struggling right now, so flexibility should be a given. But this should also apply to the usual way of doing business. Question whether different products or services can be used speed up lead times. Offshore Electronics, for example, has offered its customers credible alternatives that deliver the same level of performance without having to wait for original parts to come back into stock. The benefit here is customers only have to look at the spec sheet to approve orders, rather than having to do all the research themselves.
Commit customers to orders
It’s important for SMEs to get some form of commitment in place during a supply squeeze, especially if they complete work on behalf of others. Customers who are firm with their purchase orders are more likely to secure what’s needed when compared to those who wait. This approach also provides a better view of the months ahead, giving business owners the assurance (and capital) needed to make agile decisions when going to market. Beyond this it’s also important to commit customers to orders, even if they are months or years ahead, simply because ‘normal’ service is unlikely to return any time soon.
Trust your partners
Supply chain troubles are the result of several competing factors that are largely out of anyone’s direct control, so it’s natural for SMEs to scrutinise every decision being made during unfavourable periods. For many, this will extend to suppliers and other partners necessary for completing jobs or maintaining the same level customer service. Despite feeling like the wrong thing to do, ceding control to these parties is often the most productive move. After all, they know the market better than anyone else and giving them the power to make key decisions will usually keep delays to a minimum, especially when competing for in-demand product.
Be honest
Very few businesses have been unaffected by the supply troubles that have developed over the last two years, so most customers will be prepared to wait longer than usual. Many SMEs will also have explained the situation to customers already, but it’s still important to be transparent and resist the urge to overcommit. Those that do will likely underdeliver and damage a hard-earned reputation. Clarity is always better than an unwanted surprise.
Upskill staff
Upskilling staff is an excellent way to limit disruption and is especially important for SMEs with lower headcounts. If a colleague can jump quickly between two different departments, there’s a better chance that opportunities will not be missed. Someone in Offshore’s sales team, for instance, can pick up a job in purchasing without having to put customers or suppliers on hold while they get up to speed. This ability is particularly important if a business is competing for materials or parts as they’re often bought up as soon as they become available.
