As per the India Brand Equity Foundation, the funds received by the manufacturing sector from both foreign and domestic investors are on the rise.
It indicates that the manufacturing corporations of our country are showing rapid growth for the past few fiscals; one of the main reasons behind it being the enhancements in the supply chain process and other business essentials.
Key terms to be aware of to run a business
All companies, especially manufacturing corporations, should be aware of key terms like inventory management, supply chain process, etc., which are must to run a successful business.
Such concepts not only help to increase business profit but also offers a major contribution to streamline the management process.
- Inventory management
As the name suggests, it is the effective management of a firm’s inventory. Business owners must know about inventory management to optimise it correctly.
In case of any shortage of space in the company inventory, the whole business can become unstable.
For manufacturing businesses, raw materials and finished products are both required to be exchanged to and fro from the inventory at a certain rate to increase business efficiency.
There are various types of inventory management systems, out of which the following are the ones which every company must adopt in their business module –
- JIT manufacturing
One of the popular inventory management methods incorporated by most Indian businesses, just-in-time manufacturing system, promotes companies to keep raw materials or production units in the inventory at a certain amount that is required for the manufacturing process.
- EOQ model
In case of an economic order quantity model, businesses make sure to reserve adequate inventory space for products so that the purchase of excess raw materials can be negated.
- MRP method
Material requirement planning is another inventory management method in which supplies are added to the storage in a timely fashion, with respect to past sales records of the business.
- Supply chain process
The supply chain is a sequence of steps which businesses follow to ensure that raw materials, upon going through a certain work process, is turned into a finished product and readied for delivery in the market.
These steps start from receiving materials from the suppliers and end with the finished goods being delivered to the end-user.
An efficient supply chain process is an administrative structure that is adopted by businesses to streamline supply chain step.
Other business essentials
As an entrepreneur, you also need to possess certain skills in order to start a business. It is important for all individuals to identify certain skills which require development or improvement such that they can successfully deal with their daily business operations.
Some of the skills that every business owner needs to have are –
- Marketing, sales and customer satisfaction
All businesses are also required to promote their services or products effectively. So, marketing skills along with basic knowledge in sales is also important as it helps a business to increase the working capital.
- Communication skills
As a business owner, you also need to possess communication skills to negotiate with the suppliers, distributors, customers, employees, investors, etc.
This enables you to build a strong working relationship among your employees; this, in turn, will help to reflect the image you have been trying to project as the employer.
- Financial management
Business owners are required to understand the basic fundamentals of financial management to forecast their cash flow and estimate the net profit or loss of their company.
Hence, several small-scale enterprises avail the services of an accountant not only to run the business profitably but also to avail financing under the name of the enterprise. Such external financing may include an equipment loan to improve your cash flow from leading financial institutions in the country.
Products like Bajaj Finserv Business Loans help borrowers buy equipment, machinery, etc. to streamline their company workflow.
Hence, from the above discussion, you can make a fair idea of the key terms you must not miss while running a business. You must also have these skills to ensure your company stays successfully in this highly competitive market.
