Small Business Supply Chain Rides a Wave of Change

The digital supply chain takes no prisoners. Far too many small businesses are being left in the dust by customers and lower tier suppliers as a tidal wave of automation, analytics, and digital communication protocols overwhelm companies who cannot keep up with evolving supply chain management methods.

Let’s peel away several pages of the calendar and discuss Tony and Sonny from S&B Electric, a small but very important supplier to a large capital equipment OEM I worked for a while ago. This company was outstanding on service and inventory. Many times, the company bailed me out of a bad moment by not only having the product I needed on hand but having the owner drop the parts off on his way home from the shop.

We’ve all had suppliers like S&B. Either Tony or Sonny answered the phone and when they went ‘to the back to check stock’ you heard the telephone fall onto the metal counter. Within a minute or two they were back on the phone with an inventory level and an aggressive price. Two hours later the parts were on my dock…along with a hand written packing slip. The handwritten invoice followed a day later.

Nice guys, great service, super pricing, and product knowledge second to none. But sadly, these suppliers are often headed to the scrap heap, a victim of an enterprise system that has little succor for a supplier who spoke in numbers and words and not bits and bytes. Happily S&B lives on today, after meeting the increasing digital requirements of its customers.

Small suppliers are under pressure from the buy side and the sell side. We are reading and writing about Supply Chain 4.0, yet many smaller companies are still barely engaged with Supply Chain 1.0. In that case, managing the supply chain is an administrative chore and not part of a dynamic business strategy that will help to improve their operations, finance, and customer satisfaction.

But all is not lost with small suppliers. Many new businesses and start-ups have a wonderful digital profile. What they need is an understanding of the supply chain and its importance to their success. Some older businesses have a solid understanding of the supply chain but need access to the tools and techniques required in the upstream and downstream supply chain. Organizations like the Small Business Administration the Manufacturing Extension Partnership, and SCORE can provide help. In some cases, their suppliers and customers can help as well.

Good guys like Tony and Sonny are unfortunately relegated to the ‘quaint list’ of past suppliers, and customers, who are remembered fondly for a job well done but not adept enough to make it in today’s digital world. We’ve got to fix that.