Supply chain management is of utmost importance to the world as we know it today. The smooth running of supply chains is dependent on several factors and instability in any of these factors might result in SCM hurdles. Experts in the field say that too little systematic talent development and too hazy a measurement system may be confounding our efforts and investments at exactly the time they are needed most.
SCM is all about providing the right product in the right quantity to the right place and the right time. While it does sound simple, it can get complicated quickly.
Cost
Supply chain costs are greatly dependent on on ever rising energy/fuel and freight costs, greater number of global customers, technology, increasing labor rates and new regulations and rising commodity prices. Managing SCM costs and keeping it at optimal levels is a huge challenge.
Complexity
There is a constant need to manage the “complexity of ‘omnichannel’ selling and customer fulfillment. The demands of e-commerce and mobile-enabled consumers are increasing the number of stock keeping units they have to support. There is a constant need to upgrade distribution centers and direct-to-customer fulfillment capabilities.
Planning & risk management
To stay as efficient and effective as possible, periodic assessments and redesigns are required. These adjustments are carried out in response to market changes like new product launches, global sourcing, credit availability and the need to protect intellectual property.
Read more on SCM risk management here.
Supplier/partner relationship management
Contracts between businesses are very important to create, understand and follow mutually agreed upon standards. It is mandatory that both supplier and customer are on the same [age. So, a mutually agreeable contract has to be followed. Having two different methods for measuring and communicating performance and results wastes time and effort.
Talent
Supply chain management requires an extensive understanding of the key competencies and duties in supply chain management roles before they hire people for such roles.
Not everything can be fixed with technology
While there is state of the art SCM technology in most SCM units today, it does not offer a solution to every SCM problem. It cannot control your supply chain and vendor resources. As a first step, you must first have a specific level of organized control within your supply chain relationships.SCM technology is most effective when you have the ability to control your logistic providers and trading partners.
For more on SCM, read this.
