The recent paradigm shift of modern business management compels individual businesses to compete in terms of supply chains, rather than an autonomous entity. This makes it vital for businesses to integrate the company’s intricate network of business relationships and respond quickly to changing consumer demands and fluctuating market conditions.
It has considerably increased reliance on suppliers and has created the need for organizations to manage supplier relations, information, and contracts effectively. Moreover, organizations require supply chain planning systems to establish a streamlined supply chain planning process that can derive the best value from their spending. Also, a supply chain management system is important to gain 360-degree visibility into their supplier ecosystem. However, there are certain challenges companies face during supply chain planning.
At SpendEdge, we understand that an effective supply chain planning is crucial for almost all industries to run their businesses smoothly. Therefore, in this blog, we are highlighting the key supply chain planning challenges faced by companies.
Interested in running your business without interruptions? Get in touch with our experts and leverage the benefits of an effective supply chain management system for your organization.
Supply chain planning challenges faced by companies
Many times, increasing product complexities drive excess costs for companies. Not only this, the amount of stock keeping units (SKUs) increases and hits product cost targets as well. Firms involved in the omnichannel business (multiple-channel distribution) often face this challenge while supply chain planning.
Changing market dynamics
The behavior of consumers depends upon different cultural, social, personal, and psychological factors. It creates pressure on companies to reinvent their products and introduce new products at regular intervals. However, businesses need to ensure that they keep manufacturing costs low as trends don’t last long and the majority of products have short life-cycles. This is a common supply chain planning challenge that makes it imperative for businesses to build strategies that can adapt to fluctuating demands and production needs.
Rising transportation costs
As consumer demands continue to grow, enterprises are compelled to broaden their portfolio to attract the rising number of buyers. Organizations are emphasizing on fast frequent delivery through one way or the other. Companies such as Amazon have turned to the supply chain to employ new technologies. This has further increased pressure for firms to realize the advantages of value chain objectives.
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Procurement has always been considered as a medium to save the cost of goods sold but in the new age, procurement plays an integral role in business expansion. It is crucial for supply chain planning and making businesses competitive. Also, procurement experts can play a significant role in the branding of new products and market development after the cost waste and discrepancies have been sorted.
How to achieve competitive supply chain planning?
To succeed in the growing global market and achieve a competitive supply chain planning, companies need a follow these five steps:
- Move to real-time supply chain planning
- Integrate supply chain planning with the organization’s planning
- Predict the demand of customers
- Leverage real-time data across all points of the supply chain
- Ensure flexibility to cope with disruptions