Supply chain management (SCM) is the process by which supply chain activities are managed to have an advantage over competitors as well as maximize the value of our customers. It basically represents the efforts by which the supply chain management solutions help to develop and manage supply chain activities in the most efficient way.
To provide this balanced insight, we canvassed our panel of internal experts and identified the following supply chain management challenges.
Supply Chain Management Challenges
Manufacturers and retailers are capitalizing on new opportunities like automation and expanded supplier choices. But at the same time, the digital factory boom and an interconnected supply network are adding new risks and complexities.
Short Product Life Cycles
Short product life cycles create an environment full of risk. There are so many changes that happen over the course of the life cycle, so you will need to carry extra inventory to make sure you have enough products on hand to meet your customer demand. Unfortunately, this means higher carrying costs and a greater risk to your bottom line if the product does not perform the way you expected it to.
To resolve this issue, you need to create several supply chain policies that show the changes in life cycle demand. With these patterns on hand, you’ll be able to compare your plans based on changes in prices and customer segments and/or new markets to find the best results.
Lack of traceability
Traceability, or the ability to track the food product through all stages of the supply chain, is now more of a demand rather than a request among many consumers today. Many consumers now want to know where all products and their ingredients, even the trace ones, come from.
This makes it more important than ever to have good data on food products and your supply chain. Having and sharing authentic information from each and every step of the food supply chain enhances food safety, strengthens brand integrity, and increases customer loyalty.
Lack of traceability and transparency, on the other hand, can create blindspots in your supply chain and expose you to unnecessary risk. It can weaken consumers’ trust in your brand, which can translate into lower sales and profits. It can even give rise to certain legal issues that can stall new product launches.
The lack of traceability in the food supply chain is typically caused by companies using outdated systems or traditional paper tracking and manual inspections. These introduce errors and delays into sharing information.
By creating a mutually sound and harmonious relationship with your partners or suppliers, you will be able to provide your customers with products of high standards in a timely manner. This also allows you to create opportunities for improvement in terms of performance.
By building a strong working relationship with your supplier, you would be able to work efficiently and come up with a better output in a short period of time.
Reducing security risks supply chain management challenges
The digitally connected supply chain, while a boon for data-driven decisions, has created a problem entirely new to supply chain management: a risk of data breaches and compromised sensitive information.
In 2019, large-scale cyberattacks are in the top five global risks in terms of likelihood, and seventh in terms of impact, according to the World Economic Forum’s 2019 Global Risks Report. Of 916 respondents across a broad range of sectors, 82 percent expected cyberattacks to result in increased risk to data theft, and 80 percent to disruption of operations.
supply chain management challenges Merger and Acquisition Activity
The slower your data integration process, the slower the pay off. Mergers and acquisitions are valuable in company expansion and the consumer electronics industry, but that means you need to consider a variety of enterprise resource planning (ERPs) systems. However, in the supply chain, these systems don’t usually work well together.
The faster you can merge data, planning, and analytics, the faster you will reap the rewards of your investment. You’re planning solution should be able to incorporate data and model the behaviour of multiple ERP systems. Once this data is collected, you can manipulate it, analyze it, and reduce your inventory and cost risks. With a current set of data, your plans will be more accurate and likely to succeed.
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