Challenges of Supply Chain Management

Challenges of Supply Chain Management

With the global nature of sourcing and procurement there are many challenges of supply chain management for modern enterprises looking to optimize their performance.

Global competition pushes all sectors of the market across all industries to move fast and digitize their processes to reap the benefits of digital transformation and the transparent view into consumer trends, risks and opportunities full digitization enables.

​It's clear that the complexity inherent to supply chains remain a challenge for management. 

In this post we highlight the most pressing challenges along with, what we think are the best ways - digital transformation - to meet these challenges head-on and reap advantages for any supply chain management risk reduction.

​The Top Challenges of Supply Chain Management 2019

1. ​Rising Risks in the Supply Chain

​Many rightly perceive rising risk in the supply, first it was financial risk in 2008 and in the past few years the risks have mostly focused on the following:

  • ​Trade War, the unresolved trade war between the USA and China has been ongoing since July 26, 2018 with no end in sight and continued uncertainty for many with supply chains, both manufacturing and retail, in China.

    As a risk reduction measure, factories have been relocating out of China to Vietnam, India and other low labor cost countries throughout Asia.

  • Civil Unrest​, unpredictable events like the civil unrest that has been ongoing with no end in sight that ​​​in both Hong Kong and France augments uncertainty and, by its nature, can not be easily planned for.

  • Brexit​, ​​​the UK leaving the EU is set to take place but keeps being delayed, it was originally scheduled for March 29, 2019.

    Affects of the Brexit will touch all companies doing cross-border business with the UK and the EU as regulations and previous privileges will be reconfigured as the exit completes.

    The custom union and single market currently enjoyed will no longer exist and thus more complexity will be added to the global system.
  • General ​Market Uncertainties​,​​​ will Trump be impeached? Will China's growth flat line? Iran? Across the globe we are experiencing unprecedented events and uncertain times, the risks are mounting.

2. ​Consumer Expectations

​The digital revolution has swept across all consumer markets and continues to make its impact felt, most notably for companies trying to stay ahead, consumer expectations have been forever changed by new services enabled by digital and the speed of delivery of products standardized by companies like Amazon.

From same-day-delivery, to product customization and personalization, not to mention 24/7 always on availability of customer service - the demands consumers are habituating for all sectors of the consumer market make supply chain planning and demand management difficult to say the least.

3. ​Complex Patterns of Customer Demand

​Consumer demand goes up and it goes down. Either from personal preferences, changes in taste, trends or the cycle of technology -- the volatility in demand is hard to predict and the tried and true strategy to defend against unwanted inventory due to this risk is just in time manufacturing.

To maintain profitability lead times from factory to retail shelf are compressed. Inventories are kept to just enough. With such thin margins for error when operating under the just in time model, the resilience of the system matters.

​To overcome the shifting demands, planning professionals are working more closely with marketing and product teams to sync variables of demand that companies have control over.

4. ​Collaboration Across the Supply Chain

Collaboration Across the Supply Chain

​As the image above highlights, collaboration and syncing of data across the supply chain can be complex but is essential to an effective supply chain.

​Collaboration should be termed the supply chain alignment imperative.

​Continuous collaboration between your vendors, factories, finance, compliance and logistics teams keep the chain in motion and must be easy and can be done today with the right software systems.

​The traditional model of collaboration has been excel and email. This just won't cut it in the modern supply chain. It is too complex. Thus the right software with permissions, real time updating and dashboards is the answer.

Collaboration is a competitive advantage in the supply chain​, and it is feasible with the proper strategy.

​“Supply chains are everywhere.  From the biggest company in the world to running your househould.  We all have supply chain experience even if we don’t know it.”


​Wrapping Up

As the risks to supply chains seem to keep climbing, the challenges of supply chain management show no sign of abatement.

​For the most competitive supply chain organizations, like many global top ten retailers, they remain at the forefront of overcoming supply chain challenges via technology and process automation with software undertaking a continuous optimization strategy of digital transformation within their organization, across their procurement teams and among their vendors.

​Thanks to the digital revolutions, consumer expectations will continue to rise and profits will continue to flow to the most nimble companies that can respond to rapid changes in the marketplace as well as shifting consumer demand.

Collaboration with vendors and and timely data shared in real-time throughout the supply chain, from factory floor to retail shelves and cashier sales throughput, enable an inventory edge that will continue to trump less transparent competition.

Knowledge is power and closing the information gap across the supply chain will continue to be a challenge for many.

​Don't Get Left Behind

​Schedule a free consultation with Visichain to ensure your supply chain and procurement operations continue to evolve and remain competitive in today's dynamic ​environment.

Richard McGirr

Do you need to create value and deliver change in your enterprise? With Visichain as your partner, you can leverage over 1 million hours of supply chain transformation experience from some of the largest companies in the world. Visichain drives visibility, productivity, and efficiency throughout your entire supply chain. Supply chain visibility at scale is essential to your business. Starting with the production of products all the way through free on board receiving, your business needs real-time data to help you minimize risk, drive efficiency, and make better decisions. Visichain designs, develops, and implements powerful yet easy to use software. Powerful solutions crafted to help your executives and supply chain managers leverage multiple data systems to partner with sourcing suppliers in real time. When you're ready to kick your procurement transformation strategy into high gear, send me a message through LinkedIn.