Home Business Insights & Advice Why the supply chain is crucial to your businesses success

Why the supply chain is crucial to your businesses success

13th Apr 18 9:43 am

Why the supply chain is so integral to long-term success

According to conservative estimates, a staggering 96 per cent of businesses fail within 10 years of their launch, with universal challenges such as cash flow and operational costs particularly damaging to firms over a sustained period of time.

For product-oriented businesses, the lack of a high-performance supply chain can also undermine even the best commercial propositions, particularly if they operate internationally and trade cross-border.

In this post, we’ll look it this more closely and ask why the supply chain is so integral to the long-term success of your venture.

Firms with a High-Performance Supply Chain Achieve Greater Revenue Growth

Let’s start with the basics, as operating a high-performance supply chain translates directly into superior revenue growth.

In fact, 79 per cent of companies with high-performing supply chains achieve revenue growth greater than their industry average, primarily because they’re able to bring their products to market quickly and in a high volume.

To put this into context, just 8 per cent of firms will less capable supply chains achieve above-average revenue growth, so this is an important point to keep in mind as an entrepreneur.


Global Supply Chains Can Account for 90 per cent of a Businesses Cost Base

We’ve already touched on the example of global, product-centric businesses, and in this instance the cultivation of an effective supply chain can represent the single biggest cost.

According to some estimates, firms with global supply chains (which includes a large number of growing corporations in the modern age) can attribute around 90 per cent of their total cost base to supply chain expenditure.

As a result of this, firms that can develop cost-effective and high-performance supply chains are the best placed to achieve longevity in their market and build a viable profit margin.


Your Supply Chain is Central to Good Customer Service

Your supply chain will also have an indirect impact on the level of customer service that your business offers, particularly when it comes to delivering goods in a timely manner.

With an efficient supply chain that taps into large delivery networks, you can exceed the growing expectations of consumers without compromising your cost base.

The key to this is collaboration, as you look to partner with reputable couriers that retain access to a global marketplace. Remember, logistic firms of this type have spent years cultivating an accessible global network, so it makes financial and commercial sense that you would buy into this rather than attempting to create your own from scratch.

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