Supply Chain


Small Companies

Joshua Schultz



Supply Chain

A Network of Companies


As buyers receive product, they perform value processes and prepare to make money. That is, to ship and become suppliers.


In order to provide product to a customer, there are certain raw materials needed to transform. Therefore, sellers are inherently buyers.


A Network of Operations

Rather than think about firms, consider processes / operations.

This allows you to streamline

A Network of Operations

Consider the repeated parts for each transfer as chance for optimization

Supply Chain

Material Flow

  • Sourcing
  • Procurement
  • Quality
  • Logistics


Material Flow


The Right



  • Google Search

  • Directories (ThomasNet)

  • Postings (Alibaba)

  • Transaction Data (Import Genius)

  • COI (Zhou)

  • Foreign for-hire

  • Random / Lookout


  • Response Time

  • Email Professionalism

  • Quote Professionalism

  • Online Presence

  • Certifications

  • Target Questions

  • Audit Forms

  • Visits

  • Audits

  • Quality Machine List

  • Production Equipment List


  • Other customers

  • Other markets

  • Samples

  • Dual Order


Material Flow

Order the right part, on time for the right price.

Right Part

  • Information Agrees with Supplier

    • ​Verbal review

    • Sales Confirmation

    • Signed Intent

    • Make sure your order states everything!

  • Requirements

    • Dimension

    • Certifications

    • Industry Norms

    • Compliance

    • Packaging

    • Shipment

    • Quality Requirements


  • Lead Times

  • Transition Times

  • Supply Route Disruptions

  • Internal Turnaround Time

  • Usage

  • Minimum Orders

  • Locale specific criteria

  • Order Grouping

  • Shipping consolidation waits

Right Price

  • Part Cost

  • Material Understanding

  • Geographic Considerations

  • Shipping & Freight (FOB)

  • Trade Regulations

  • Quality Time

  • Admin Time

  • Storage Costs


Material Flow

The Part
Your Order

Check all "Source Documents"


  • Legal compliance

  • Customer Purchase Order

  • Customer Design Prints & CAD

  • Customer Referenced Documents & Standards

  • Customer Instructions, Guides, and Procedures

  • Industry Standards

  • Industry Norms

Document Findings

  • Checklists
  • Records
  • Photos


Material Flow

& Store












Shipment Type Urgent Not Urgent
High Volume Look for Alternative Source Boat
Low Volume Air Boat or Air

Decision Matrix

Inco Terms


Supply Chain

Information Flow

  • Supplier Management
  • Part Management
  • Order Management
  • Quality Information

Supply Chain

Financial Flow

  • Cash Cycle

Cycle Factors

  • Inventory levels
  • Inventory turns
  • Accounts Payable
  • Accounts Receivable

Cycle Factors

  • Higher Inventory is Less Cash
  • Inventory / (COGS / 360)
  • (AP x 360) / COGS
  • (AP x 360) / Sales

Terms Matter

Other Considerations

  • Lead Time to Cash Cycle
  • Return on Investment
  • Cash is Optionality

Supply Chain Considerations

  • Compliance
  • Inventory & Storage
  • Communication


  • Export Controls

  • Military Controls

  • Sanctions and Black Lists

  • DFAR

  • FAA

  • Flow Down

Inventory & Storage

  • How will you stock and organize?

  • How much safety stock is enough?

  • How will you pick?

  • What will the shipping process look like?

  • How are parts pulled?

  • Labeling

  • Shelf Information

  • Packaging 

How will you communicate with...

  • Customers

  • Suppliers

  • Co-workers

  • Partners

How will you communicate on...

  • Orders

  • Issues

  • Questions

  • Processes

  • Design

Product Cycles


Test pieces usually made in extremely small batches for form - fit - function approval. Use specific prototyping settings. Will not be actual production process, supplier, material, lead times, costs, etc.


Higher volume production, good for end unit testing and selling. As project scales, continual improvement in material, inventory, production methods, and even supplier at times.

Assume Change!

Design for

  • Procurement
  • Testing
  • Function
  • Quality
  • Manufacturability
  • Safety





Supply Chain Cycle

The Cycle

  • Usage

  • Demand Plan

  • Order

  • Production

  • Shipment

  • Incoming

  • Inspection

  • Assembly

  • Testing

  • Distribution

Creating a

Supply Chain

The Issues in Creating

  1. Find suppliers
  2. Qualify suppliers
  3. Quoting
  4. Placing Orders
  5. Tracking Orders
  6. Receiving Orders
  7. Tracking Production


With a tightened BOM you need to look for suppliers for each part.



  • Try Domestic and Foreign
  • Look for Low/Mid/High
  • 3-5 for each risk premium
  • Always be Developing


With a list of suppliers in hand, you need to find the one(s) you will try



  • Capability
  • Capacity
  • Character


Send out a request for quote. This doesn't need to be super professional. One line, to a full out RFQ.



  • Price, Time, Quality
  • Professionalism
  • Response Time

Purchase Order

Send an order

to the chosen




  • Contract
  • Terms
  • Reduce Risk
  • Rely On


Understanding shipments, timelines, methods, dates.



  • Know when it's due
  • Know when it's off schedule
  • (Have a schedule)


The receiving process sets up all others, can greatly reduce errors if done well, and saves hours of time if invested.



  • Record Receipt
  • Ship / Stock / Cage
  • Tracability
  • Product Info if first
  • Package / Label

Managing a

Supply Chain

The Issues in Managing

  • Information
  • Communication
  • Compliance
  • Negotiating
  • Traceability
  • Metrics & Data
  • Own The Relationship


Set up how you want things done, and share it with your suppliers. Create policies to prevent issues, problems, and risks on your end. Streamline your operations for logistics and inspection by putting in place requirments


Answer all common questions and share them with your customers. Make your processes clear and alleviate their concerns.


Write complete and clear emails!

Suppliers carry risk and thus remain technical.

Undertand the Regulations

  • ECCNs
  • ITARs
  • HTS
  • Hazardous
  • Antidumping

Ignorance isn't accepted as a excuse.

Trace Everything

  • Figure out Traceability Granularity
  • Create a scalable system
  • Record / Save Relentlessly

Metrics and Analysis

  • Create Strategy Objectives

  • Find the few metrics that show how well you are doing.

  • Find where that data is created or kept

  • Create a way to obtain or collect the data

  • Create non-intrusive systems for assembling

  • Create automated systems for reporting

  • Understand the strategy is greater than the metric

  • Look for blind spots

Relationships Solve Problems

The Small

Supply Chain Team

1 Person

  • Good Luck!

2 People

  • Parts
  • Information (Info / Money)

3 People

  • Flow - Parts
  • Flow - Information
  • Flow - Money

4+ Team

  • 2:2:1 ratio for Parts:Information:Money

5 People

  • Warehouse (Parts)
  • Inspector (Parts)
  • Quality Manager (Information)
  • Admin (Money)
  • Buyer (Information)


Use Team Inboxes

You want to focus on systems that scale with breaking.

Document Everything

Repetition will harm you. 

Mistakes will kill you.

Meaninglessness will frustrate you.


Write everything down. 

  • Reduces Training
  • Increases Scalability
  • Creates a Core to Improve
  • Reduces Mistakes
  • Reduces Risk

Record Everything

Data created within the organization should be recorded and kept, as seamlessly as possible. 


  • What data do you need?
  • What is the best media to keep it?
  • How will you search it later?
  • Create Templates.

Keep Up

Things can get out of hand fast. Boxes pile up, orders stack on your desk, email inboxes get flooded with responses to your requests. 


1. Clean up

2. Have a System

3. Keep it up


Automate as much as possible. Some tools I have used for this include:

  1. Trello
  2. Templates
  3. Python Scripts
  4. Alfred / Butler
  5. Custom Software
  6. Zapier


Many tools integrate with others, creating a way to leverage data in one, in another. This means collaborative systems can be created very quickly with minimal transaction or transition time.

Do Work Once

You'll find you are often asked for, or ask for the same information over and over. Answer once, then use that for templates, checklists, forms, and manuals.

Grab Data Quietly

An example of this would be activity metrics that are grabbed automatically by doing the activity.


Non-intrusive usually trumps idealism.

Key Processes & Procedures

Contract Review

A Contract Review is a review of your supply chain, procurement, and parts to make sure they meet the customer source documents and requirements.


Customer Info?

Part Info?

Supplier Info?

Quality Actions

Quality Actions are generally categorized into nonconformance, corrective, improvement. They are for both internal and external issues. These are the lifeblood of the improving organization.

Demand Planning


Demand planning is essential.


  • Lead Time
  • MOQ
  • Consolidation
  • Domestic / Foreign
  • Material
  • Storage Cost
  • Seasonality Use/Time Yr
  • Usage Patterns


Receiving sets up production for success.



  • Coding
  • Packing
  • Recording
  • Stocking
  • Data Entry


The largest root cause I see is communication.



  • Not being clear
  • Not recording
  • Not systematizing
  • Not updating
  • Not including people
  • Not responding


The second biggest root causes has to do with how information is created, captured, shared, analyzed, and used.


  • Create Scalable Systems
  • Formalize Data Capture
  • Automate Data Analysis
  • Work Backwards

Revision Control

Understanding where and how new revisions are managed at both your site and your suppliers is key. 


How are you ensuring:

  • Sharing of updates
  • Production changes
  • Inspection changes
  • Supplier receipt and control of documents

Lot Control

Tracing everything from the supplier on through is essential in problem-solving, providing service, being compliant, and protecting yourself.


  • Create a lot system
  • Make sure it is in physical form
  • Make sure it is in digital form
  • Consider Hashing

{:supplier=>"", :customer=>"", :part_number=>"12345", :revision=>"06", :quantity=>"2000", :date=>"2019-10-22 20:24:44"}


Parts and inventory should be ordered to be quickly found and assembled. The method largely depends on your business and pick methods.

Internal Audits

This has one of the best idea generators for improvements we have (as well as a great way to find problems before someone else does).

Key Forms & Records


A form is a subset of a record. It is a document with specific spaces to record various types of data. It can be digital or paper.


A record is recorded information that is created as a result of a procedure. It is part of the output of a repeated system.

Key Forms & Records

  • Purchase Order

  • Sales Order

  • Packing Slip

  • Pick Report

  • Job Router

  • Invoice

  • Inspection Checksheet

  • Company Information Sheet

  • Contract Review Form

  • Non Conformance Form

  • Print / Design Record

  • Material Requisition

Logs & Lists

  • Open Order Log

  • Non Conformance Log

  • Supplier List

  • Part list

Information & Record Keeping

Streamlined Information

  • Parts
  • Import/Export
  • Suppliers
  • Customers
  • Your Business
  • Employees


  • Part Number
  • Description
  • HTS
  • COO
  • Order Notes


  • Formal Name
  • Address
  • Certifications
  • Supplier Manual Read
  • Capabilities


  • Formal Name
  • Address
  • Routing Instructions
  • Tax Exemptions


  • Name
  • Address
  • SSN
  • Date of Hire
  • Exemptions
  • Role 


  • Information Sheet
  • Credit Reference Sheet
  • What we do sheet
  • Hours
  • Routing Instructions
  • Policies
  • Corporate Books

Data Organization




  • Where / How
  • Organization Structure
  • Nomenclature


  • Templates
  • Master List
  • Historical Records


  • Manuals
  • Strategy Documents
  • Standard Work
  • Findings/Learnings
  • Questions
  • Tables



Outsource your sourcing by buying access to vendor databases. You can also hire sourcing firms. They are usually expensive and good for only for critical high cost/use parts.


Third-Party quality labs like IMR in Ithaca are good for material and other tests. 


Procurement firms specialize in doing purchasing. This is usually done with MRO items that are identical for multiple divisions and departments.


Outsourcing storage can be anything from renting a warehouse, to do a full on fullfilment option.


You can outsource to contract manufacturers or CMs. Creating process and procedures is still on you. There is a large amount of creation and training up front; and ongoing quality costs thereafter.


Customs almost must be outsourced (unless you are an extremely large firm). The easiest thing for smaller firms to get a reliable freight forwarder.


Setting up domestic shipments can be costly and time consuming. Using a 3PL keeps costs low and admin time outsourced.


Data management and analysis and becoming more and more important. Many small firms don't have the in-house talent for this and so many outsource.


This is where Chess or Procurem might fall in.


  • Productivity Suites
  • Systems
  • Tools


  • Google Suites

  • Office 365

  • Trello, other

  • Slack

  • Onenote

  • Slab / Notions

  • Mediawiki 

  • Alfred


  • Supplier Data Management

  • Accounting Systems

    • Xero

    • Quickbooks

    • SAP



  • Material Resource Planning

    • Excel

    • Smartsheet

    • SAP

  • Enterprise Resource Planning 

    • Quickbooks

    • IQMS

    • Epicor

    • SAP

  • Quality Data Management

    • IQS

    • GageTrak



  • AWS

  • Nextcloud

  • Pipedrive

  • ScannerPro / Scansnap

  • Zoom

  • Solidworks

  • Adobe Acrobat

  • Python / Jupyter Notebook


  • ISO 9001:9015
  • AS9100 D
  • Export Controls
  • Six Sigma


  • Communication - General (Slack)

  • Communication - Process / Kanban (Trello)

  • Communication - Collaboration (Onenote, Quip)

  • Information - Files (Dropbox / Nextcloud)

  • Information - Documentation (Slab / Mediawiki / Jira)

  • Supplier Management (Procurem)

  • Lot Creation

  • Form Examples


From Upstate New York. Worked in finance for 5 years, got an MBA, and now in supply chain for 8 years.


I am a systems guy at heart. My roles include Director of Operations, software developer, data scientist, professor, consultant, investor, founder, board member, husband & dad (my favorite).


I have lived in New York, Rochester, Rome Italy, Nanjing China, Monterrey Mexico.

My Work

I own and run four supply chain firms focused on:

  1. Supply Chain Services
  2. Supply Chain Software
  3. Supply Chain Analysis


I help build supply chains, customers, ml models, operations, companies, expansions, software, markets.


My interests and research are currently in:

  • Organization through Human Dev
  • Demand Planning through AI
  • Traceability through Cryptography
  • Strategy through Community



  • Procurem - SRM

  • Procurem - VMI

  • Open Source Manual

  • Sonar

  • Github - joshuamschultz

  • (soon) Data Science for Supply Chain

  • (soon) Supply Chain Community


Made with