When running a business, it’s vital that you understand how to balance supply and demand. Otherwise, you could wind up not being able to fulfill the orders that you get or having inventory that just sits on the shelves. However, being able to find this balance isn’t always easy. So to help you get closer to the most ideal balance in these areas, here are three ways to help you find the right balance with supply and demand for your business.
Understand All Aspects Of Your Supply Chain
One of the first things that you’ll need to wrap your mind around before you can really start to hone in balancing supply and demand for your business is your supply chain. If you don’t know where your products or materials are coming from and what the process is to get them to you, you can’t hope to be able to know enough about your business to find any kind of balance with supply and demand.
As part of this, you’ll want to really focus your attention on lead times. Lead time essentially means working backward from when you need something delivered to you or your customer in order to get it from your suppliers so that you can provide the product when it’s needed. In some businesses, lead times might be very short. But for other businesses, the lead times might be very long. So to ensure you have what you need when you need it, you’ll need to know what kind of lead times you’re working with.
Err On The Side Of Meeting Demand
The reason you want to find the right balance between supply and demand is because you want to be able to provide for your customers and clients when they need something but you also don’t want to spend too much of your own money upfront and then have that money sitting and wasting away. However, if you’re going to have to err on one side or the other, it’s usually a good idea to err on the side of meeting demand.
While this might cause you to have a little too much inventory in stock at any given time, this is usually a better problem to have than having to turn away business or send potential customers to your competitors in order to get what they need. So as long as you know how much volume you’re capable of filling, you should try to keep things pretty well stocked.
Perfect Your Marketing
When times come where you have too much inventory that you need to get moving fast, having a solid marketing strategy can be invaluable. With good marketing, you can encourage people to make more purchases and create the demand you’re looking for.
If you’re needing to strike a better balance between supply and demand for your business, consider using the tips mentioned above to help you with this.