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With the rising globalization of different operations from manufacturing all the way to warehousing, having a network of procurement which is capable of supporting and reacting to the needs of the supply chain is a challenge. In fact, many procurement professionals believe that selecting a supplier who is capable of providing manufacturing locations consistently and offering a reliable service is a challenge. Effective management of the supply chain enables businesses to track products and raw materials required for the manufacture of their products. It also enhances optimization of inventory levels and reduces costs which in the process lead to synchronized supply and demand.  

Visibility is an important thing in the supply chain. A properly managed supply chain enables companies to maintain the highest possible visibility to ensure that materials are available and are delivered to the customers. An effective supply chain enhances efficiency and helps businesses eliminate halts in production as it identifies areas which an enterprise relies on a single supplier.

Effective supply chain management provides businesses especially the manufacturers of different products with a competitive edge. However, there are various issues and challenges in supply chain management mainly in today’s business landscape. Here are three issues to consider within your own supply chain.

  1. Globalization

Globalization introduces various supply chain challenges to businesses and companies. First, as a way of seeking to reduce costs in the supply chain, companies are moving to nations which offer lower costs, taxes, and transportation of raw materials. Such outsourcing practices in some instances may involve more than one country in different regions. However having suppliers of different products or materials from different regions and geographic locations can also lead to complications in the supply chain. Companies have to deal with issues of collaboration and coordination across borders. Storage and logistics issues may also arise making the entire process even more painful. Furthermore, companies have to ensure and maintain fast delivery lead times to their customers who no matter the circumstances want to receive their products on time.

  1. Fast changing markets

The changes in technology and globalization have affected personal, cultural, social and psychological factors of consumers. Changing consumer markets also have an impact on supply chain management as it introduces new customer dimensions. First, the product life cycle is reduced significantly due to changing customer demands. Businesses are forced to keep up with the new market trends and continuously innovate by introducing new products that meet the needs of consumers. Due to this, there is also a demand for flexible supply chain which can accommodate changes in the manufacturing of new products as required by the customers.

Changing markets also demand that the enterprises update features of their products constantly. Doing so requires them to redesign their supply chain to accommodate these changes. Such market changes also make forecasting of product demands difficult. However, the changing demands in the market make it necessary to continuously study the market and develop new products.

  1. Quality and compliance

The rise of social media apart from the influence it has on consumer behavior also makes it compulsory for companies to develop high-quality products. Consequently, rising consumer expectations have increased the rates of product recalls. This means that the supply chain must be able to respond to these challenges accordingly. Companies are under pressure to create high-quality products consistently and this can only be achieved by addressing various aspects of the supply chain which include quality of supply of raw materials, procurement process of raw materials, manufacturing processes, packaging, and transport/logistics all the way to the handling of the product.

The quality of products also largely depends on the company’s compliance. As such, companies need to make sure that both local and international regulatory standards are met. Supply chain aspects such as product manufacture, packaging, and logistics should pass quality control and safety checks. All these aspects are not easy to conform to in most instances and some of them end up making supply chain management costly.

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Scott Koegler

Scott Koegler is Executive Editor for PMG360. He is a technology writer and editor with 20+ years experience delivering high value content to readers and publishers. 

Find his portfolio here and his personal bio here

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