Startups have tremendous potential. With the right idea and a bit of funding to get going, it can feel like the sky is the limit. However, without the proper logistics in place, the whole operation could crash and burn quickly. How can startups get logistics right?
First, it’s important to understand what logistics entails. It encompasses all aspects of moving your raw materials, products and components from suppliers to warehouses and customers. It’s the part of the supply chain that involves the movement of goods, and it can make or break your fledgling business.
What Worked Initially May Not Be a Good Long-Term Option
Many times, startups acquire a small amount of inventory to sell initially after creating a prototype. This can certainly get you off the ground, but that initial inventory is often not acquired in a manner that will work well in the long term.
Perhaps the unit cost was on the high side, for example, because you didn’t need a lot of them in the beginning. And if it’s something you or your workers made yourself, the process might not be scalable. When business starts to take off, you’d better have a plan in place for getting the items your customers want quickly, as you’ll still have to worry about getting them delivered in a timely manner. Now is the time to start thinking about this.
You’ll also need to plan a freight method. If you get your demand and production planning right, you can get the slower–and cheaper–methods to save some costs and hopefully boost profits. You also need to make sure your team is prepared to process orders quickly to keep your customers happy.
Logistics is complex and there are a lot of factors involved, but it all boils down to one basic tenet: bringing your customers the goods they want when they want them while spending as little as possible doing so. Learn more.
This blog post was based off of an article by The Balance Small Business. Read the full article here.