Six key issues in Supply Chain Management and solutions to overcome them
Supply chains around the entire world are growing in complexity every second. We will try and shed a light on some of the most notable challenges, that Supply Chain Management is facing in late 2022 and 2023 and suggest a way to solve these challenges.
1. Adapting to constantly changing consumer demands
Consumers around the globe are expecting a faster delivery, without having to pay extra for the service.
Their demand for faster order fulfillment due to the e-commerce last mile race currently occurring or meeting customer demands for omnichannel communications and better service.
Flexibility and better communication within your entire organization is the key component here. As well as establishing a network of reliable suppliers to secure the lowest possible delivery time.
As far as reasonable pricing goes, consumers are expressing their need for no added delivery costs. Better to raise the price of the product to compensate for additional add-on regarding delivery.
2. Minimize the delivery and logistics costs and to maximize sales
When the products are ready to be sent out from the manufacturing facility, the company has to decide where to send the goods, how much to send and through which channels the goods should be shipped and delivered to minimize the delivery and logistics costs and to maximize sales.
Companies can overcome this challenge by optimizing the supply chain through data, information and using automated processes to make decisions.
3. Mitigating and accounting for unforeseen delays somewhere along the chain
Increase supervision and create efficient procedures against delays in the supply chain.
Having a reasonable level of buffer stocks on-hand, rather than trying to mitigate issues is a key solution to challenges in supply chain management.
4. The expectation of innovation and raising capital for investment in technology
Most surveys and research suggest that cost is the biggest deterrent to investment in technology. Part of the problem is that investing in technology relates to big risk.
Will the technology be compatible with suppliers and customers? Will employees adapt quickly and well? Will it go obsolete quickly? Will it require frequent maintenance and re-tooling?
The solution for this problem can be hard for small- and medium sized companies. Since raising capital is a major issue for companies in a world influenced by inflation and rising consumer costs. Companies with a healthy and sustainable economy, that have plenty liquidity are better equipped for the challenge.
For other companies, starting with a simple solution to test compatibility and efficiency benefits will be the better and less risky choice.
5. Global suppliers can result in a loss of control
A global line of suppliers increase the risk of loss of control. Who has responsibility for safety protocols, quality testing, expenses, and labor?
Extended delivery times can result in a lower level of control. Companies relying on global suppliers often does not possess the same amount of overview.
A high level of precision is also essential when it comes to consumer satisfaction and if you outsource parts of the supply chain, the risk of error could increase.
Creating a unified unit of suppliers and educating them well. Thereby ensuring consistency and lower risk of errors.
One central logistics center flanked by smaller hubs of suppliers in different countries around the world – all working towards the same goal and through the same procedures.
6. Inflation at a global scale
Everybody is experiencing a huge increase in price for goods and products – consumers ad well as businesses.
Inflation is hitting consumers purchasing powers hard, and a lot of homes are saving up – rather than investing or spending money.
A huge problem in supply chain management is finding the perfect balance between “out of stock” and overflowing stocks.
Many companies tend to use a LEAN strategy to avoid overflowing stocks. However, with ever increasingly costs, investing in products and a big warehouse stock could be the solution.
A unified and automated supply chain
We believe that companies can achieve significant advantages by insourcing or maintaining the entire supply chain. In order to create an efficient supply chain without outsourcing, we suggest establishing a supply chain were flexible and innovative automatization constitutes the essential core.
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