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Before starting a business, map the supply chain

Putting a supply chain in place before launching a new product or service is critical for success. That's why I collaborated with Denise Montrose, from Small World Recruiting, to offer some insight into creating a supply chain. This article originally appeared on Trade Ready.

When a new business is launched, it’s critical to plan and build a supply chain that can not only meet the immediate customer requirements but can flex to respond to future demand and market conditions.

Plan your supply chain before launching your business

Before launching your business, map out your supply chain and go beyond determining where you will get your supplies from and how you get them to your customers. Consider lead times and alternate supply strategies if necessary.

Evaluate risks that your supplier’s supplier might have, or whether your goods will be subject to cost, environmental, regulatory, infrastructure and geopolitical factors. Determine if warehouse space is needed. Consider the number of items needed to meet demand and whether an internal facility can be used for storage. Location matters and may impact cost, accessibility and speed to market.

Do your research


Identify potential suppliers; consider their location and how it will impact the way you receive orders, and inquire about their processes, capabilities and financial health. Find a supplier that aligns with your values and not just your price point.


Get to know your customer base so you can manage expectations for shipping costs and delivery times. This will help you determine which delivery method will work best for your business — slower but more cost effective, or quicker but higher cost. Software

The beauty of a new venture means you collect important data from the very beginning. Finding software that can help you track demand, inventory levels, lead times, price and costs will provide better forecasting (and cost savings!) in the future. Linking purchase orders to finance systems will increase order to pay efficiencies. Capturing real time order and shipment status will improve customer service.

Sourcing and contracts

Let your suppliers and shippers know your needs ahead of time to avoid questions, delays or inaccurate pricing. This lays the foundation for a strong relationship. Pick the best supplier(s) for your organization, but also consider contingent solutions. Share contractual terms and conditions in your request for proposal to streamline contract negotiations. Protect your company’s strategies and data with confidentiality agreements.

Processes and people

Once you’ve determined which supplier and logistical links to include in your supply chain, put processes in place and hire supply chain professionals to work with suppliers, order materials and supplies and forecast customer requirements. Organize to allow for category and product expertise to develop. This function should also manage risk mitigation for suppliers and goods and services critical for the business.

Tracking and measurement

Now that your supply chain is up and running, identify critical metrics and track key process elements. Analyze how long it takes to receive materials, ship to customers, turn over inventory, find supplier performance defects, etc. Use data to identify root causes, fine-tune processes, eliminate redundancies and improve relationships.

Evaluate and re-evaluate

Knowing how external and internal factors impact your supply chain will help you make efficient and effective improvements. Be aware of what risks could affect your organization and suppliers; develop mitigation plans for those that are most likely to result in significant impact. Listen to your supply chain team and encourage innovation from suppliers for the next great idea.

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