“True wisdom is knowing what you don’t know.” – Confucius
This is a perfect quote for young, high-growth technology brands. You have your strengths—developing market-winning products, accelerating customer acquisition, marketing your way into a crowded category.
But one key to success for any emerging technology brand is knowing when to outsource. For many younger companies, outsourcing things like human resources, customer support, and financial planning is fairly common.
However, there’s one often-overlooked aspect of technology operations that should get more outsourcing attention—the supply chain.
If you’ve ever felt that backend support is keeping your brand from achieving its growth potential, it might be time to partner with a supply chain manager. Here are four pain points that a supply chain partner can help you overcome to accelerate the growth of your business.
1. SHORT, HIGHLY-VARIABLE PRODUCT LIFECYCLES
Emerging technology brands are especially good at remaining agile and developing products that meet ever-changing consumer demand. However, it’s difficult to translate flexibility and agility in development and marketing to supply chain operations.
When product features are constantly changing, you’re forced to carry extra inventory to ensure you’re able to respond quickly to adjustments. Not only does that increase the costs of supply chain management, but it also increases your risk if an entire product line suddenly goes obsolete.
One way that a supply chain partner can help you combat this challenge is to improve your lead time maintenance. By maintaining accurate lead times, you can avoid wasting resources on materials for products that will change or become obsolete and you can bring some stability to otherwise highly-variable product lifecycles.
Working with a supply chain partner can help you:
- Shorten lead times by achieving just-in-time fulfillment, which reduces costs and prevents order delays.
- Ensure that manufacturers consistently deliver accurate mixes and quantities of your SKUs to the right locations.
- Preserve cash flow with minimum order quantities (MOQs) on materials as opposed to overstocking for a buffer to safeguard against delays.
2. SPRAWLING PARTNERSHIPS IN GLOBAL SUPPLY CHAIN NETWORKS
Bringing a consumer electronics product from raw materials to customer hands requires a wide variety of vendor partnerships. With so many moving parts, it can seem almost impossible to gain visibility into every corner of your supply chain. And when your goal as an emerging brand is to maximize agility, these issues can slow growth to a halt.
The highest-level solution to these problems is to design a supply chain that’s better-suited for your high-growth demands. And one of the most important aspects of a well-designed consumer electronics supply chain is vendor consolidation.
By reducing the number of suppliers you buy from, you can focus your spend on a limited number of reliable vendors and reap benefits such as:
- Complexity Reduction: Fewer relationships to manage and maintain visibility into means fewer points of failure across your supply chain. For an emerging technology brand focused on agility and flexibility, minimizing complexity is a necessity.
- Cost Management: When you have a sprawling list of vendor partnerships across your supply chain, it can be difficult to scale your operations without cost management issues. To scale your supply chain as the business grows, you need a streamlined set of partnerships that keep internal processing costs low at high volumes of transactions.
- Continuity of Supply: Order delays and manufacturing disruption are the fastest ways to derail business growth. When you consolidate vendor relationships, you reduce the number of points of failure and gain more control over continuity of supply.
3. INVENTORY FINANCING FOR LARGER CUSTOMERS
Selling to big-box stores and major online retailers is only half the battle. The other half is having logistics and fulfillment strategies that can withstand the pressure of high-volume orders.
Inventory financing is one of the biggest roadblocks to success when you start to land deals with the biggest customers in the world. As product sales fluctuate, liquidity problems will put pressure on your supply chain’s ability to support the delivery times expected from big-box retailers. And if you don’t deliver, they’ll cancel your orders and set your growth back even further.
A supply chain partner that offers inventory financing can help lower stock holding to dramatically improve inventory turns and delay your inventory ownership in the supply chain. When looking for a partner that offers inventory financing that supports your brand’s growth, pay special attention to these four services:
- Vendor managed inventory (VMI) that optimizes your level of capital and frees cash flow for value-added tasks.
- Managed procurement for purchasing stock directly from manufacturers on your behalf and reducing your initial ownership stake.
- Inventory management to ensure optimal levels of raw materials, component parts, and finished goods at all required locations.
- Invoicing and payment management for all suppliers, 3PLs, freight forwarders, customs duties, clearance fees, and sales taxes.
4. DECIDING IF A NEW PRODUCT IDEA IS WORTH PURSUING
When you’re outsourcing supply chain management, it’s important not to start thinking about supply chain operations and new product development in silos. Just because you have a great new product idea doesn’t mean it makes sense to pursue it.
Without an experienced partner, you might get deep into the new product development process only to find that your supply chain isn’t well-suited for high-volume sales. A few things that could complicate new product development in the supply chain include:
- Oversized items that increase a retailer’s storage costs
- Costs of shipping and handling fragile products
- Long procurement cycles that can’t align with big-box retailer delivery demands
Working with a seasoned supply chain partner at the product ideation phase will ensure you’re planning with the backend in mind. That way, once it comes time to develop and launch the product, you’ll be ready to scale quickly and accelerate the growth of your company.
FINDING A SENSE OF STABILITY FOR HIGH-GROWTH TECH BRANDS
Young, high-growth technology companies are accustomed to instability. You know how to react quickly to market demands and adjust your vision accordingly.
However, when it comes to the supply chain, instability is a problem that quickly slows the momentum of your business.
Don’t let a poorly-designed supply chain limit the potential growth of your brand. Contact us today and find out how our fourth-party logistics services can help you create a supply chain tailor-made for accelerating your growth.