Why Start a Supply Chain Business?
Starting a supply chain business can be highly rewarding due to the continuous growth and essential role of these industries in the modern economy. The increasing demand for efficient and cost-effective transportation solutions makes this domain ripe for entrepreneurial ventures. If you’re wondering how to start a supply chain business, the first step is to conduct thorough market research to understand the industry’s dynamics. Identifying your niche, whether it’s freight forwarding, warehousing, or last-mile delivery, is crucial. Similarly, if you already have supply chain business ideas, then before you start your supply chain company, you should assess market needs and identify gaps you can fill. Your business plan should detail your supply chain solutions.
Upcoming Trends in Supply Chain Business Industry
1. The Omnichannel Method Will Take Over Revenue Management
There is an obvious battle between online stores and traditional brick-and-mortar shops, as the latter lost a lot of terrain in the favor of online shopping. Thus, most of them adopted the omnichannel method, with the main purpose of attracting more clients and generating better revenue.
2. Automation and Shortage of Drivers
Many companies hope that autonomous cars will soon be safe enough to be released on public roads, vehicles that will solve their driver shortage issue and reduce costs. But, since that is not going to happen anytime soon, one of the biggest challenges of logistics companies is to do their best in attracting sufficient drivers. Without them, it is impossible to record the desired level of performance in the field.
3. The Tariffs May Change Significantly
Companies around the world take into consideration the modification of current tariffs, something that will significantly change the existing supply chains. It is not known when it will happen and how, although some companies already started re-designing their supply chain so that they will be ready in case of tariffs change and prices go up.
4. Digital Technologies Still Have a Lot of Say in This Industry
The players in this industry are still very fascinated by the existence and emergence of various technologies, like IoT, autonomous cars, machine learning, and so on, which they regard as the solutions that will make their businesses more effective and successful. Whether this will happen, we will have to see. Although the fascination for technology continues, many companies are trying to see how they can use them to improve their performances.
You may refer to the detailed guide to logistics management and international logistics and supply chain management for a detailed understanding of logistics and supply chain management.
How to Start a Supply Chain Business?
Fundamental Requirements to Start a Supply Chain Business
- You need financial resources to fund your SCM business and perform the required investments;
- Begin by obtaining all the permits and licenses you need to have such a business;
- Check out the tax permits in your state, as you will have to cover these as well;
- Do a thorough research of the market first, which includes studying your competition, to see how they are doing and what they may be missing, so you can come up with something fresh;
- Come up with a solid business plan, based on your research. You can start out by self-funding your business, but things may evolve slower this way. Consider including necessary factors.
- You can apply for a loan as well, a supply chain business requiring $250,000 to $300,000 to get started until managing to generate the first funds;
- Set up an official office for your company;
- Get insurance that will have the business covered;
- Hire your first employees to start doing business.
Personal & Professional Skills That You Must Develop
- Solid analytical and numerical skills;
- A good amount of knowledge in business supply chain management;
- Attention to detail;
- The ability to make good decisions, even in high-stress situations;
- Knowing how to be a team player;
- The ability to adapt fast;
- Excellent interpersonal and communication skills.
AIMS’ best online MBA in logistics & supply chain management and Training on Supply Chain Management as a Career Path are well-known qualifications to develop the necessary skills that you may need to start a supply chain or logistics business.
How to Sustain & Grow Your Supply Chain Business?
A. Create a clear map of your business’s supply chain
You need to have a clear view of the supply chain, this includes seeing the challenges your business and supplies are facing. Each supplier may face a set of risks and to understand these risks will help you make adequate adjustments to the chain so that problems are avoided.
B. Make sure your vision is well communicated
If you have several shareholders in your supply chain business, make sure that each of them knows and understands your vision. You should do the same with your employees and any other person that is part of your business so that everybody will work in the same direction.
C. Establish good connections with other business leaders in this industry
It is very difficult to make it on your own, so creating and maintaining good connections with other, more experienced leaders will give you the chance to find the solutions you need to the problems that may arise.
6 Supply Chain Business Ideas
1. Warehouse and Ordering Services
Offering storage and distribution solutions to e-commerce companies is an easy-to-manage supply chain business. You are required to provide space and logistics support and manage their inventory and orders.
2. Logistics Consulting Firm
You are required to provide expert advice on optimizing logistics and suggest logistics cost-reduction strategies.
3. Sustainable Packaging Solutions
You can develop biodegradable or reusable packaging materials for companies that are focused on focused on green supply chain management and looking to appeal to eco-conscious consumers.
4. Supply Chain Software Development
Suppose you are an expert in information technology. In that case, you may create software or consult a supply chain business that is seeking software solutions to track and manage their inventory and streamline communication across the supply chain.
5. Cold Chain Logistics
Your supply chain business can provide temperature-controlled space to companies who deal with perishable goods, such as food and pharmaceuticals.
6. E-commerce Customization
You may choose to start a supply chain business that creates bespoke solutions for online stores.
8 Steps to Start Your Supply Chain Business
Step 1: Market Research and Analysis
First of all, you should conduct thorough research to understand supply chain industry trends, customer needs, and market competition. Then, identify the market gaps and choose the right supply chain business for you.
Step 2: Supply Chain Business Plan Development
Create a detailed supply chain plan. The plan should outline the following: Your business model, foals, operational plan, finance, and marketing strategies.
Step 3: Legal Structure and Registration
Decide on the legal structure of your supply chain business, such as a sole proprietorship, partnership, or corporation, and register your business name accordingly. Obtain all necessary licenses and permits to run the business in your location and your chosen supply chain area.
Step 4: Financing
Determine your initial capital requirements and explore various financing options, such as personal financing or investors/partners.
Step 5: Supplier and Partner Selection
Identify and establish supply chain relationships with reliable suppliers and partners. Building a strong supply chain network is vital for ensuring a smooth supply chain management process and meeting customer demands.
Step 6: Technology and Infrastructure Setup
To run a smooth supply chain business, you must invest in the right technology and infrastructure to streamline your operations. Implement supply chain management software to track inventory, manage orders, and forecast demand effectively if they are part of your supply chain business.
Step 7: Hiring and Training
Build a skilled team according to your supply chain management business model, who can execute your business operations efficiently. Provide comprehensive supply chain management qualifications, such as supply chain management expert certification, diploma in logistics & supply chain, and MBA supply chain and logistics. This will ensure that they understand your systems and processes thoroughly and make you succeed.
Step 8: Marketing and Launch
Develop a marketing plan to promote your supply chain business. Launch an event or campaign to create buzz and establish your presence in the supply chain industry.