Top Challenges for Supply Chain Management
An efficient supply chain management can help companies to save costs and enhance customer delight by offering better services. It’s capable of streamlining logistics and warehousing, and alongside saving such costs, it also optimizes the inventory cost. However, it always isn’t as easy as it seems, and managers do face different roadblocks in devising an […]READ MORE >>
An efficient supply chain management can help companies to save costs and enhance customer delight by offering better services. It’s capable of streamlining logistics and warehousing, and alongside saving such costs, it also optimizes the inventory cost. However, it always isn’t as easy as it seems, and managers do face different roadblocks in devising an efficient supply chain management strategy. The volume and complexity of transactions done today make managing supply chain a daunting task. Here are some of the challenges supply chain managers face while managing the supply chain.
A modern-day customer is difficult to understand as they want products at a good price. Also, different clients have different priorities; some can wait but want a good deal while others are ready to pay a premium to procure immediately. Managers are always faced with a trade-off between cost, quality, and time. Managing differing priorities across the supply chain is a challenging task for the supply chain management system.
Demand unpredictability is a phenomenon that is ever-present. But, over the last few years, there has been an increase in the number of factors contributing to demand fluctuations. Thus, demand forecasting has been a complex task even with the introduction of sophisticated forecasting models. An efficient supply chain management system relies heavily on accurate demand forecasting. Deviations in the forecast need to be adjusted into the supply chain planning system and require strategic adjustments.
Most companies stock a variety of products and SKU’s, which are recorded in a supply chain management system. The discrepancy in actual stock versus recorded stock can result in a loss. Apart from this, managers also face the challenge of estimating optimal stock levels of each product and product categories. Forecasting the optimal stock level can be a challenge for the supply chain management system due to the unpredictability of the market, which can result in inventory shrinkage and stock redundancy.
Hence, even though supply chain management system is capable of optimizing the supply chain in numerous ways, it cannot do it all. However, a modern-day ERP system can solve many of the mentioned problems with proper planning. Thus, companies are turning towards technology to address the problems with their supply chain management systems.
To know more about the challenges for supply chain management.
- IoT: A Gamechanger in Supply Chain Planning
- Cloud Technology Changing the Supply Chain Management Landscape
- Green Procurement: Guidelines, Challenges, Benefits, and Implementation