Entrepreneur Resources Your source for small business information
Most businesses have some kind of resources coming in and going out them. Whether it’s manufacturing materials, key tools of the trade, or products. While a lot of businesses will focus on quality and marketing, they’ll fail to take the logistics of resource management into account. Which, as we’ll show, can put them in a lot of danger. So, here’s how you get smarter in managing your resources.
Get demand right
It’s a problem that businesses fall into far too frequently. Maybe they’re hopeful about the results or maybe they just think it’s good to have resources prepared for the future. But the truth is that not understanding the demand and overspending on resources is dangerous. It leaves you fewer funds to accommodate changes down the line. It gets even worse when you consider the cost of inventory, but we’ll cover that in more depth further down the post. Make sure you’re keeping data on how quick you use and move resources in your business, so you’re getting just the supply you need and no more.
Know your supplier’s supplier
A big part of getting that supply is making sure you know who’s giving it to you. But it’s not enough to know them. You need to know as much about their business as you can. You need to be kept updated of any risks to their own supply and who they get it from. If a supplier is unwilling to share those kind of details with you, you should consider looking elsewhere. Otherwise, you can get caught off-guard and be made very vulnerable if they’re dealing with one of their own risks.
Know every component
If you’re working with machinery or complicated tools, you should also get more in depth than knowing just who sold you the piece of equipment. If you have a problem with a specific part, you want to go to a specialist for that specific part. If you’re using hydraulics machinery, you want to know the part of it that’s causing a problem. For example, is it to do with the hosing or the clips and clamps? Get to know the people who provide those specific components. It’s much more cost-effective than using the middleman.
Don’t keep dead weight
We’ve mentioned cost of inventory, because it’s vitally important. Keep items in storage doesn’t just cost you money. It also costs opportunity if you don’t have enough space left for other inventory. Make sure you’re not sitting on resources you’re not using. We’re not only talking about gauging your demand right. We’re also talking about making sure you have a quick logistics and transport system to take the completed products off your hands. Inventory costs might seem like a small slice of the pie, to begin with, but it’s a constant cost that can burrow away at your finances.
When it comes to your resources, the more detailed you can get, the better. The more you understand the demand and the costs, the more you can see the risks of getting it wrong. We hope the points above get you thinking more specifically about your own resource management.
