Are you involved in the supply chain? If yes, you may encounter some issues that hugely impact your operations.
Innovations and new technologies are necessary to meet the supply chain demands while eliminating challenges. Supply chain managers are expected to plan ahead and keep everything run smoothly.
Beware that the combination of international complexities, more routes to market, consumer expectations, and other factors can result in significant challenges within the supply chain network.
Most supply chain managers observed the increasing challenges to develop and keep effective supply chain methods. These challenges continue to skyrocket more than you can imagine back almost a decade ago. While the supply chain strains become more intense, the management needs a robust plan together with constant measurements that target the weak points. Plus, a top-rated supply chain software is critical to reduce or prevent any issue.
In this post, you will discover the different supply chain issues and what drives them to take place. Let’s start!
Issue #1: Increased Costs
Once the costs increase throughout the supply chain network, your profit margins tend to become under pressure. The increased costs come from multiple areas. If you lack accountability and visibility to reduce them, expect more operational expenses.
Below are some of the significant contributors why costs may increase:
- Complex international logistics that result in higher charges for product management, transfer, and storage
- Higher labor costs from manufacturers and suppliers
- Skyrocketing commodity prices that raise the raw material costs
- Increasing fuel price to transport goods by air, sea, or land
Issue #2: Consumer Demand Requires for Improved Service, Quality, and Speed
When consumers have less choice and each industry deals with disruption, it’s no surprise why you have to face a supply chain issue. Remember that each touchpoint with the end-users requires focusing on delivering excellent and satisfying products or services.
Speed and quality continue to become as critical as pricing in terms of purchasing goods. That is because more and more consumers want retail goods they can get immediately. When it comes to online goods, they want to receive them in a few days.
Another thing that you should do to avoid this supply chain issue is to your products should meet the quality requirements according to the consumer demand. You also need to consider the safety and any other compliance regulations regarding finished products, goods, and raw materials.
Additionally, environmental goods sourcing becomes more critical for consumers who are ethically aware. Bear in mind that if you want to create successful products, you have to take extra effort to meet the consumer requirements of price, availability, and quality. Plus, the underlying supply chain plays a critical role in meeting those requirements.
Issue #3: Complexity Due to Multiple Market Channels
It is a normal scenario to see that consumers purchase products from different channels. That is why you have to ensure that while there are increased routes to market, the underlying supply chain adapts.
If you are a supply chain manager, you have to develop supply chain process variations. That way, you can address every channel, including:
eCommerce Websites. If you sell directly to your customers via eCommerce websites, you need to secure local logistics and fast last-line delivery.
Traditional Wholesales and Retailers. These individuals involved in the supply chain requires large storage location near the metropolitan areas. They also need accurate inventory control. So, rest assured that they will ensure product availability.
Drop-Shipping Retail. In a dropshipping retail setup, fast international services are critical. That is because consumers want to receive goods as quickly as possible.
Third-party Marketplaces. Different third-party marketplaces need a deep fulfillment options understanding. They also need to get familiar with the terms and conditions of compliance.
As a supply chain manager, you have to manage multiple third parties, supply chains, and other organizations. By doing so, you can ensure a satisfying customer experience no matter how they order and receive products.
Issue #4: Pressures in the Supply Chain
Economic, environmental, and international complexity pressures together with trade disputes put the supply chain under pressure. As a result, you need to ace risks and issues throughout the supply chain network leading to problems, such as:
Quality Management, Compliance, and Regulations. These three demand strong controls, contracts, and agreements with multiple supply chain organizations.
Lack of Visibility. If there is a lack of visibility, there will be increased difficulty reporting, making good decisions, and business intelligence.
Additional Supply Chain Steps. Once you add more steps to the supply chain, you are only creating exponential complexity for the downstream and upstream partners.
Customers, Clients, Logistics, and Suppliers. These individuals are spread across different time zones, countries, and continents, and they need careful management and coordination.
For such a supply chain issue, you have to develop and maintain contingencies. You also need to mitigate action plans to ensure that you are effectively eliminating risks while managing issues.
Issue #5: Volatility in the Supply Chain
Rather than creating issues at a particular point in the supply chain, complexity and volatility affect the entire infrastructure. Before you start creating bottlenecks, backlogs, delays, and other problems, you must promptly resolve this issue.
Political protectionism and circumstances introduce tariffs in different trade routes. This results in delays, additional fees, and increased processing time. Meaning, there is slower international shipping and the ability for the competitors in various countries to get low tariffs.
If there are increased internationally-sourced goods volumes, expect additional pressures. That is because trains, trucks, and ships have to wait to load, unload, and transfer the goods. This issue is being exacerbated since the port operators and authorities charge the organizations when storing products at the port.
As a supply chain manager, it is your responsibility to determine issues and get rid of them. This might be a great challenge for you, but you can make a great difference in the long run. Don’t worry; you can take advantage of supply chain software to help you simplify your tasks while eliminating potential issues. Remember that with enough knowledge about supply chain issues, you can easily create a solution for them.