Adapting Your Small Business Supply Chain in Response to COVID-19

Boston Beer Company’s Purchasing Manager Sandra Paterson, Buyer Jonathan Young, and Print Production Packaging Manager Doug Ramsay explain how to prevent interruptions in your small business supply chain due to lockdown rules and the COVID-19 shutdown. Here’s how to protect your business from COVID-19 disruptions.

 

How Small Businesses Can Prevent Supply Chain Disruption

Paterson recommends staying in close communication with your suppliers to ensure you stay informed of any supply shortages or potential interruptions to the supply chain. Paterson recommends setting up a weekly chat so you can ask for insight into any items you are looking to source from suppliers.

 

Paterson says to inquire about whether there could be potential shortages. She says to make sure your suppliers all have enough inventory in stock to keep you adequately supplied with whatever you need to keep your business and sales moving forward. That way, if there will be a shortage, Paterson says you can be given adequate notice so you can buy some inventory in advance to get you through. If you can’t afford to buy upfront, Paterson suggests perhaps arranging with your suppliers to set aside inventory so you can continue to purchase supplies as needed.

 

Paterson says to ask your supplier if they anticipate any problems in the future. She says to ask where they get the raw materials to manufacture what you need and to trace where things are coming from and what problems could be coming down the pike that could potentially interrupt the supply chain both short and long term.

 

Paterson says it’s a good idea to also keep a second supplier on backup in case your frontline supplier suffers a shortage that can’t be remedied in time to avoid a supply chain interruption. Paterson says that if you feel like “just a sale” to your supplier or if they aren’t communicative when trying to establish a relationship, versus a company that actually values you and your relationship, then don’t be afraid to use your secondary supplier.

What if Your Business Can’t Get Supplies?

Young notes that with shipping delays and other causes of supply chain interruptions, he says there are creative ways you can get restocked. Young notes that there are local sellers who have an excess of ingredients, and by purchasing ingredients locally, you’re supporting your local economy. He says if you can afford it, stock up on whatever you might need and load your business’s pantry.

 

Young says it’s important to be adaptable and creative when it comes to restocking inventory. He says to reach out to a neighbor or counterpart in the business so you can pool orders to hit minimums if necessary when bulk ordering. He also says to look for opportunities for new revenue streams. He gives the example of a barbershop that was shut down because they weren’t allowed to cut hair, and so they turned to selling t-shirts for a time to make money. He said Dogfish Head turned to manufacturing and selling hand sanitizer to the state of Delaware when there were shortages.

Creative Cost Cutting for Small Businesses

Young recommends looking for creative ways to cut costs. He says you can potentially limit costs by paring down the assortments and variety of products sold and instead pushing products that are historically best sellers. That way you aren’t spending money on extra inventory that won’t necessarily sell as well.

 

Young says that cost variables can add up and impact your business if you aren’t careful. He says to run the numbers and factor inadequate padding to account for shipping, packaging, sourcing different ingredients, or other issues that might arise as a result of making changes to your business operations. Build out your margins and make sure you adapt to the current market. This might mean raising prices and passing extra costs along to the consumers.

 

Ramsay notes that for a business owner who would go from selling in an open market like a farmer’s market for example to trying to fulfill online orders due to the Coronavirus shutdown, there are some special considerations they might not be aware of. Ramsay says to make sure to add in enough time to ship the product and to pack it in such a way that the goods remain fresh and undamaged. He says if you decide to deliver or to encourage customers to pick up curbside, you can avoid paying for shipping.

 

Since shipping costs seem to be very high, and at times can be as much as the product you’re trying to sell, Young says to research alternative options for online shipping companies. You might be able to get cheaper shipping than UPS or the post office. ShipStation and Pirate Ship may be viable options for your business. Learn more about them and read reviews before choosing anyone to do business with.

Conclusion

Keep your business running smoothly throughout the pandemic. The Coronavirus doesn’t need to signal the end of your business, as long as you remain flexible and willing to adapt to the changing market. Stay proactive and ahead of interruptions to your supply chain, and cut costs wherever possible. Together, we will make it through the storm!

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