20 Minutes a Day to an Optimized Supply Chain

You Can Optimize Your Small Business Supply Chain in Just 20 Minutes a Day

Supply Chain Time
Supply Chain Time. Getty Images

You are a small business owner, and therefore, you are busy. If you’re a small business owner and one of the business’ few (if not only) employees, you officially belong to the “busiest people on the planet” roster. 

With as little as 20 focused minutes every day, you can optimize your supply chain and move on to managing the rest of your business. Your 20-minute process to drive small business supply chain optimization looks like this:

First 7 Minutes of Daily Supply Chain Optimization

Ask yourself (or your “team,” if you have one), “Did we deliver what our customers wanted? (since the last time we had this meeting)" This simple question delves into your capability to make and deliver quality parts.

Since yesterday, did you ship what you planned to ship? That means when you went to put a product in you a box to ship it, did you actually have that part? That speaks to your inventory accuracy. 

If you don’t have 100 percent inventory accuracy, you are going to fail your customers. You also don’t know the value of your company. How do you know if you have 100 percent inventory accuracy?  Do this litmus test — look at your inventory management system.

Your inventory management system might be your ERP/MRP system, or an Excel spreadsheet, or a piece of paper sitting on the corner of your desk. Take 10 percent of your parts and then go physically count them.

Does the physical count match your system count? If not, you need to implement inventory control measures right now.

Since yesterday, did you receive any customer complaints about the quality of the parts they received?  Are 100 percent of your customers satisfied? 

These are all important questions to tackle in the first seven minutes.

If the answer is “no” to any of them — implement countermeasures so that tomorrow the answers are “yes."

Second 7 Minutes 

“Did we deliver what our customers wanted, when they wanted it?” This question drives at your small business’ ability to deliver on time. Many small businesses (and large ones, too) complain that 100 percent on-time delivery is not an attainable goal. But all of us (in business and in life) are customers. How inconvenienced are we when what we ordered isn’t delivered to us on time? Very. 

So did you attain 100 percent on-time delivery yesterday? If not, are you managing your lead times correctly? 

Does your customer know how long it takes you to deliver a product to them? Does your team know how long it takes to receive a product from your supplier and then inspect it and then prepare it for shipping to your customer? Does your team know how long it takes your supplier to deliver a product for you? 

All of those factors and the nuances therein make up your overall lead time. If you and your customers don’t fully understand them, you’re going to have trouble attaining 100 percent on-time delivery. 

If you aren’t managing your lead times but you’re still hitting 100 percent on-time delivery, then you might be answering for it in the last six minutes of your 20-minute meeting.

Last 6 Minutes

“…and accomplishing that by spending as little money as possible?” If you’re shipping to your customers but getting that done by paying for expedite fees and overnight shipping,  then your supply chain isn’t optimized, and it might be turning your balance sheet red. 

Also, pay attention to your cost of goods. This last part of your daily supply chain meeting should include a look at how much your parts are costing you.

By committing 20 minutes every day to your supply chain — and focusing your discussions to customer satisfaction, on time delivery and cost management — you’ll be working your way toward an optimized supply chain

You Are Not Alone

When you came up with the idea for your small business, you probably imagined where you would sell your product and how much you’d sell it for.

You might have had visions of your satisfied customers telling you how much they love your product, or how many times they’ve purchased it because it’s their favorite gift to give or how clever you are for making such a genius product. 

You are not alone. Every small business owner has those thoughts or some version of them. But what you may not have realized is that each one of those thoughts is built on a supply chain foundation. 

For example, when you imagined where you would sell your product, did you think about how it would get there? That’s a supply chain question. The question isn’t only, how did it get on your customer’s shelves — but how did you get it there? How did you get it from your suppliers? How did your suppliers know what to make? 

How Else Can Supply Chain Optimization Help You?

Then there’s the question of how much you sell your product for. That’s a cost of goods question — and therefore near and dear to every supply chain pro’s heart.

If your customer is a retailer, how much does your customer sell it for? That question is driven by several factors, not the least of which is how much you sell it to your customer for. And that cost is determined by how much you pay your suppliers for it — plus the amount you need to make to cover other direct and indirect costs like overhead, your employees (if any), office supplies and that coffee you’ve been pounding since day one. 

Your suppliers have the same cost of goods concerns that you do. Material, labor and overhead costs at your suppliers’ suppliers (your Tier II suppliers) are going to drive what Johnny Amazon-Shopper is going to pay for the product. 

When you dreamed up all those fantasies about the wondrous fanfare you’d receive from your customers, you probably weren’t thinking — customer service metrics are where a supply chain pro’s day starts and ends. If your supply chain is optimized, you are delivering what your customers want, when your customers want it — and accomplishing that by spending as little money as possible. 

So the first two parts of that, “delivering what your customers want, when your customers want it,” are the only things your customers care about. If you aren’t doing that, your small business might not last very long.  

20 Minutes Every Day to Optimize Your Supply Chain

That's why spending as little as 20 minutes every day optimizing your supply chain matters. By the way, if you run a larger company and you have a team of supply chain pros working full time to optimize things, I’m not saying that they’re wasting the other seven hours and forty minutes of the day. (Well, maybe not the entire seven hours and forty minutes).

Back to you, the small business owner. Twenty minutes. It’s a repeatable process that will drive results, such as increased customer satisfaction, lower costs, and fewer headaches.

Knowing you, you’re going to want to spend these 20 minutes from 10:30 to 10:50 each night. I would recommend against this. Because while it might an optimal time for you to be alone with your thoughts and supply chain questions, you’re going to want to have a life at various points throughout the year. It’s probably better if you do this during business hours — like five in the morning. 

I actually recommend doing this activity in the morning. You’ll have the data from yesterday to analyze and have the rest of the day to act — or to correct course, where things might have been sub-optimized. 

Do you want to deliver what your customers want, when they want it — and spend as little money as possible getting that done?  Start with 20 minutes in the morning.