Alleviating 5 biggest supply chain challenges

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Supply chain managers have seen increasing challenges to create, and keep, efficient and effective supply chain methods. Customers are demanding innovative products at a reasonable price and at the right time. This creates challenges for businesses since creating both responsive and cost-effective supply chains is critically difficult and often counter polar opposites. We identify the 5 main challenges and how to alleviate them.

The world is smaller than we know it with globalization

The first and foremost challenge that businesses are facing is how to reduce their supply chain costs. This coupled with satisfying price expectations and quality. In doing so businesses are looking to overseas, low-cost manufacturing processes. Although a balancing act, with expectations of quality and lower costs for their customers, this globalization movement comes with an array of complexities and can directly affect lead times.

Servicing customer expectations and preferences

As aforementioned, the complexity of global supply chains is huge. In addition, there may be factors such as product developments that are continuously changing, creating even more challenges. Customers are constantly searching for businesses to find new solutions to their needs. Innovation is critical since it allows a business to gain a competitive edge in the market, but this is also a challenge. To change a product, businesses need to redesign their supply network and meet demands of the market in a way that creates value for their customers.

Planning and risk management

Implementing assessments and redesigning of products needs to be done periodically, in order to stay as efficient and effective as possible. However, these changes are in response to variations in the market. For example, changes such as new product introduction and global sourcing, credit availability and the need to protect your items through intellectual property creates challenges. Identifying these challenges lets businesses then create plans to mitigate against such challenges.

Supplier relationship management (SRM)

SRM is becoming increasingly important. It is crucial to create, understand and adhere to mutually agreed upon standards regarding supplier relationships. A better understanding of current performance and opportunities is then available to tweak if necessary in order to improve services. By having several methods of measuring and communicating performance and results, your business is working is inefficiently. Having a trusted system in place reaps consistent results and yields better SRM.

Skills and talent within the supply chain

There is a real shortage in finding qualified and interested talent that meets your business needs. In order to become leaders in their field in regards to supply chain management, a business must look for something with an extensive understanding of the key competencies and duties needed for the roles and someone who has the ability to efficiently source specific skill sets and methods for developing future leaders.

Current supply chains are growing in complexity due to several factors. By identifying these challenges, you can create a blue print for identifying threats and weaknesses that your business can take control of today. It also allows you to refine supply chain management processes so that your business is getting the competitive advantage it deserves. With customers continuously wanting the next best thing, innovation is key and supply chain management changes accordingly. By knowing the challenges supply chain management faces your business can better its processes accordingly.

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Melanie - Unleashed Software

Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.

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