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How To Start A Business With a Supply Chain Management System

By upGrad

Updated on Feb 26, 2025 | 5 min read | 7.5k views

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A supply chain management (SCM), for a layman, is a synonym for logistics. However, it kind of surpasses the definition of logistics. With whatever the nature of goods and services a business is providing, the supply chain management system remains a critical part of it, when it comes to its mobility, handling, management, procurement etc. It essentially is a multifaceted approach involving fields of commerce, engineering, management, IT, sales and marketing, etc. which makes it on par with the rest of the corporate practices, making it a highly lucrative and a competitive field.
For any business, an FMCG corporation, e-commerce, public-private sector etc. or whatever it may be, logistics will always have an unobvious yet a very defining influence on the growth rate and success. With dire need of constant supervision, smooth operation, redesigns, and planning, Supply Chain Management can and will ensure extra revenue generation with a timely corporate run.
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Following tips on planning are listed for people planning to venture in the market with logistic business, which is absolutely quintessential for comprehending the current scenario and the aspects of undertaking to start such a business:

Know the fundamentals of Supply Chain Management System

This calls for the intense homework and analysis that can only happen with right consultancy and case studies of immediate competitions pertaining to the business type. It involves:

  1. Knowing the source of funding and investments.
  2. Knowing the regulatory and governance documents needed (licenses and permits).
  3. Knowing and formulating a business plan.
  4. Knowing the skill set required for recruiting able-bodied employees.

The list is finite but not complete and will continue to grow till the logistics have finally been put into the place. This is achieved in parts with the experience as well as supplementing with degree courses that give a theoretical basis to lay out the foundation of a business with a supply chain management system.

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Setting up Priorities

From a customer point of view and a business point of view, logistic priorities should be well thought and established, and often times they can be mingling. For an e-commerce business, the priority is safer and fast delivery, whereas, for a metal industry, the priority shifts to the early procurement of minerals with required tonnage to run the smelter, with less focus on handling and transportation. Fast and safe mobility requires more budgetary portions; therefore extensive planning, consideration and thought process are needed.

Appeal to more Drivers

It definitely remains a challenge for any big company to not only acquire correct vehicle models for transportation but also to entice more drivers. However it may be a burden on the company’s finances, but the overall impact of having more drivers is to have a greater reach beyond the places of operations with more profit yielding. This is a very critical task of attracting and hiring capable drivers who need minimal supervision and understand the importance of the product and business alike.

Managing Lead Time

Lead time refers to all those time periods which must be considered apart from delivery and arrival of a product or a raw material. Lead time can comprise of:

  1. Time to accept orders and delivery.
  2. Time for procurement and shipment from storage.
  3. Time for a supplier to deliver the product.

There are more examples of Lead time which people will automatically get aware of once the business speed off. Lead time management, therefore, is a critical aspect involving balancing of time to make sure the cost and speed of the process don’t overpower way beyond. This, in turn, keeps the business inventory in check, and up to date information on current tariff regulations and shipping, issues to deal with.

Intensive Plan of Action

An entire dedicated team should be allotted for overlooking the supply chain management system of a company to ensure logistic run smoothly without any loopholes. This primarily is deemed as the outcome of intense planning in demand and production of the business product or service, for penning out a smooth logistical design of it. Production planning simply refers to the internal lead time that is considered in formulating the entire product, whereas demand planning refers to the customer’s behaviour and aspirations from the market that drives the former. A smooth logistical operation relies on how well designed the course of action is along with the capability of the workforce to work efficiently in full sync with the rest of the business.

Vision and Connections

The ethos of any logistical trade should be well-communicated and perceived by its employees and stakeholders, whether it is just a start-up or has grown into a fully established business. This ensures full commitment and support, and should not be limited within the company only. It can be used for making useful connections with other SCM leaders and businessmen, which can offer support and act as a necessary advisory when needed, in lieu of shared interests and business vision.

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