Estimated reading time: 3 minutes, 37 seconds

big problemI like to listen to people, read group discussions, read expert opinions and make lists. So, from numerous sources, I made an unranked list of what LOTS of people regard as their biggest SCM problems. Then I searched out an expert opinion on what are the biggest SCM problems. The one I liked best was "Top Supply Chain Challenges" from the Supply Chain Council (the SCOR people). Next, I slotted the opinions of the workers in the trenches into the five categories from the Supply Chain Council. I could be wrong, see if you agree!!!

Customer service
Effective supply chain management is all about delivering the right product in the right quantity and in the right condition with the right documentation to the right place at the right time at the right price. If only it were as simple as it sounds. 


It's not only a one time commitment

Satisfy and exceed Customers Satisfaction

Customer led processes

Knowing the customer's needs

Cost control
Supply chain operating costs are under pressure today from rising freight prices, more global customers, technology upgrades, rising labor rates, expanding healthcare costs, new regulatory demands and rising commodity prices. To control such costs there are thousands of potential metrics that supply chain organizations can and do measure. Managers need to zero in on the critical few that drive total supply chain costs within their organizations. 

Finding the largest waste drivers

Continuous improvement

Lead time

Parts price increases

Unpredictable change

Ups and downs of demand

Effects of hot products and market flops

Incorrect forecasting

Planning and Risk Management
Supply chains must periodically be assessed and redesigned in response to market changes, including new product launches, global sourcing, new acquisitions, credit availability, the need to protect intellectual property, and the ability to maintain asset and shipment security. In addition, supply chain risks must be identified and quantified. SCC members report that less than half of their organizations have metrics and procedures for assessing, controlling, and mitigating such risks. 

Demand change

Coordination and synchronization of all activities in a very complex network

Pressure to react and "do something now". The more organizations react, the worse things get.

Demand Planning & Sales Forecasting

The failure to deliver on time every time resulting from regulatory intervention is a key issue to many suppliers. 

Supplier/partner relationship management
Different organizations, even different departments within the same organization, can have different methods for measuring and communicating performance expectations and results. Trust begins when managers let go of internal biases and make a conscious choice to follow mutually agreed upon standards to better understand current performance and opportunities for improvement. 

Transparency between all relevant parties

IT - integration

How to build the relationship between all parties

Having good data - which corresponds to visibility - from and at all levels of the supply chain is essential.

Communication/Collaboration breakdown between Sales/Manufacturing/Engineering/Procurement not communicating

As experienced supply chain managers retire, and organizations scale up to meet growing demand in developing markets, talent acquisition, training, and development is becoming increasingly important. Supply chain leaders need a thorough understanding of the key competencies required for supply chain management roles, specific job qualifications, methods for developing future talent and leaders, and the ability to efficiently source specific skill sets. 

Driver shortages

Lacking of insightful SCM leadership and integrated SCM management and operation team.

The most crucial point in supply chain world in any industry is people, if we have high professional people have good communication skills and good negotiation skills and can deal with systems at any task of the supply chain forecasting, managing suppliers, demand,inventory,cash flow etc.

Stuff that falls out of the box or is in all the boxes

Not specifically identified. Applicable to several areas.

Communications. Of course with suppliers and customers, but even more vital is inside your own company. We all know the problems caused by departments not communicating well with each other. We also all know how hard those barriers can be to overcome.

Increased demand volatility, lack of visibility, increase in customer expectation on service levels, lack of integration between supply chain and new product development functions, high response time to market changes, volatility in commodity and currency prices. 

Last modified on Wednesday, 29 May 2013
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