A first-round funded manufacturing company is announcing a vacancy for an administrative assistant who will support the executive team and manage human resources, coordinate facility maintenance, and handle procurement and contract negotiations.

This is yet another example of procurement being treated as an additional duty for administrators rather than a critical role. The company is missing an important opportunity to bring professionalism to a key operational area.

Serious supply chain management enables businesses to achieve higher success, reduce costs, and increase customer satisfaction—especially for small and newly established companies, where supplier performance can significantly impact both short- and long-term business success.

Some small businesses must overcome size-related disadvantages and engage more intentionally with their suppliers. A company doesn’t have to be a Fortune 500 firm to build a well-structured supply chain management approach that not only supports current business conditions but also drives future growth.

The following four pillars of supply chain management for small businesses will help establish a strong foundation for your company.

1. Understand your position in the market and use that insight to develop your procurement strategy

It is important to understand how your company competes in the market in order to create both short- and long-term procurement strategies. Companies often have diverse products and market opportunities, so be prepared to blend these strategies to create one that best fits your organization.

If your company is positioned as a low-cost provider, adopt an operational-excellence strategy that prioritizes the lowest possible cost when segmenting suppliers. Consider international suppliers whose focus is cost management. Cost reduction should be a continuous process.

If your company emphasizes close customer relationships, choose a customer-intimacy strategy where service excellence becomes the main criterion for supplier segmentation. Select suppliers who understand your service requirements, offer flexibility, and focus on service to meet your customers’ unique needs.

If your company is racing to bring new products to market, consider a time-to-market strategy that focuses on suppliers capable of rapid prototyping and fast delivery. While these suppliers may be more expensive, costs typically decrease once designs are stabilized and purchase volumes increase.

2. Identify strong suppliers and nurture those relationships

The procurement team should be responsible for supplier selection, with subject-matter experts contributing input—but procurement must have final accountability. Strong suppliers form the foundation of an effective supply chain strategy. Identify reliable sources that can meet your current operational needs and scale with you as your company grows. Work with suppliers who share similar values.

Some small businesses assume they are too insignificant to build strong supplier relationships—but this is a misconception. Most sales organizations segment their customers and seek a balanced mix of business by size, market, and revenue potential. Any business, regardless of size, can build thriving, long-term supplier relationships. Establish clear communication channels and opportunities for collaboration. Remember that many of your suppliers may also be small businesses that want to grow with you.

Avoid relying solely on search engines when sourcing suppliers. While online searches can help identify suppliers, they can also lead to confusion by surfacing consumer-focused vendors instead of business-oriented ones. Industry directories, trade associations, and professional publications offer more reliable sources for suppliers that can meet your service, technical, quality, and pricing requirements. Use the web as a supporting tool—but don’t depend on it entirely.

3. Develop both quantitative and qualitative supplier management metrics

It is never too early to start tracking supplier performance. Don’t wait for a complex enterprise resource planning (ERP) system to handle it for you. Identify key performance criteria such as on-time delivery and quality. Track your critical suppliers and develop a small set of key performance indicators (KPIs).

One essential KPI is on-time delivery. Segment suppliers into sub-groups and track their delivery performance by comparing promised delivery dates with actual delivery dates. Use spreadsheets to analyze trends across sub-groups, then add complexity and expand the groups as your system matures.

Show suppliers that you value performance by reviewing data with them. This strengthens business relationships, supports negotiations, and helps suppliers improve their operations. Routine performance meetings can reveal improvement opportunities that reduce costs. Never underestimate the value of direct discussions.

4. Manage risks across the extended supply chain

Every company faces risks, but small businesses may be more vulnerable due to limited leverage and greater financial exposure. Create a formal risk strategy for critical items and define contingency plans for potential supply disruptions. Ensure continuity of supply by identifying supplier vulnerabilities within the extended supply chain. Ask your suppliers how they manage risks and incorporate their plans into your own.

• Review their credit capacity.
For many small businesses, the accounts payable department may rely on only a few credit relationships, such as MasterCard or Visa. While this may work for small purchases from local office-supply or hardware stores, your bank and financial partners want to see stronger, more formal financial relationships with key suppliers. Be cautious about insufficient credit lines as your business grows and always pay your invoices on time. “Maxed-out credit cards” are a supply-chain risk, but “cash on delivery” terms are even worse.

• Reduce reliance on samples.
Free items can be appealing, but distinguish between legitimate samples and gifts. Suppliers sometimes bundle low-value parts that do not meet order minimums as a goodwill gesture. However, some may bypass procurement and give samples directly to users for prototyping in hopes of future orders. These items may be discontinued or new parts that could disrupt cost modeling or delivery schedules. Be cautious.

• Protect confidentiality and intellectual property.
Ensure that all key suppliers sign non-disclosure agreements. If you have critical sub-tier suppliers, require them to sign NDAs as well. Confidentiality clauses should be clearly included in your contracts and printed terms.

Small businesses must take action. Do not underestimate your power in the marketplace. Tell your story and claim your space in a crowded market. Keep communication channels with suppliers open and allow your supply chain to become a major contributor to your business success. Be the best customer you can be.