In a recent article we covered what would happen if you grew too fast. It might seem like everything will just be candy and rainbows once you hit the accelerator, but the truth is, if you grow too fast you can damage your business or even shut it down. How’s that for a motivational quote?
So, do you simply stop growing your business? Nope.
Instead grow your business in a way that does not eat up all of your cash, allows you to stay in stock, and keeps both you and your customers happy. This is “Growing Your Business Sustainably.”
The first step towards growing your business sustainably is creating a map of your product’s supply chain.
What is a Supply Chain
A supply chain is a system of processes that moves a product or service from the initial supplier to the final consumer.
The supply chain for wine starts with the grapes on the vine and ends with the bottle of chilled rose in the hand of a happy customer.
The supply chain for a marketing firm starts with a project brief or proposal and ends with a completed marketing campaign.
Each business has a different supply chain for each product.
Mapping Out the Stages in Your Supply Chain
We drive around town without directions all the time. You have familiar places and routes that you could drive without Siri. But have you ever gone on a road trip without directions? Where you just got in the car with some friends and a solid mix tape and just started driving. Maybe you have, that actually sounds liberating in a way. But liberating or not, driving a great distance without directions is much different than hitting up your local Trader Joe’s. A supply chain in a growing business can be like a trip to Trader Joe’s one day only to morph into a trip to the isthmus of Panama the following week.
The goal for this first step is to sketch out the stages your product will travel and develop through before being purchased by the customer.
Map it out:
The first thing you need to do when creating this map is to identify what the product looks like when the customer purchases it. This is where your supply chain ends. If you make t-shirts and sell them online, your product looks like a customer opening a package delivered to their house. If you are a coffee shop, your product looks like a beverage in container being handed to a customer.
Once the final form of the product is identified, you simply work backwards from that point of sale and identify any distance traveled or process applied to bring the product closer to the customer. To better illustrate what I mean, here is what it would look like to work backwards from a bottle of wine:
- The bottle of wine purchased – What the final customer pays for.
- Then move back to the case of wine delivered from the distributor to the retailer
- The cases of wine delivered from the winery to the distributor
- The wine bottled and packaged at the winery
- The raw material ordered and used for the bottling run
- The wine aged and processed before the bottling run
- The grapes delivered from the vineyard and crushed in the grape press
- And we can end with the grapes harvested from the vine.
The process can be more detailed, but for this first step it is important to have a list of what steps does it take to get your product or service from raw material into that final form that the customer is willing to buy.
What Should the Map Look Like?
You can use fancy programs to diagram your supply chain, however I would recommend simply making a list in a word or spreadsheet program, you will need to be able to edit it later, but the real value here is just wrapping your head around the process.
When you are finished putting the map of your supply chain together, you should have a clear idea of what the product looks like when the customer purchases it and what it looks like when it begins its journey through the supply chain.
Once this map is created, we can take the growth planning to the next stage and start asking questions related to links in the supply chain, assigning useful values like capacity, time, and cost. However, that will come later, for now, simply take the first step in growing sustainably, and map out the stages of your product’s supply chain.