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What Are the Main Supply Chain Challenges?

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No matter the location of the business, all supply chain has one dream; to provide a recommendable customer experience. Sadly, some supply chain organizations are struggling to achieve their goal. With the challenges that continue to affect most processes of operations, many companies lag in meeting the expectations. Issues like unmet customer need due to the rapid increase in their requirements, and the competition from international competitors among others hinder profitability. In this article, we will highlight the main challenges in supply chain management.

A great increase in the costs

Today’s economical restraints have posed a great challenge in the supply chain sector. There are increased costs in labor and energy. From most companies, the transport section eats most of their cash. The pricing of the fuel to transport goods whether on the road, air or sea is high. In general, charges for storage, transfer, and management of products speeds up the spending costs. The labor costs from the suppliers and manufacturers also lead to increased expenses that the management needs to cater for. 

Meeting the clients’ expectations

E-commerce has affected consumer needs and their buying behaviors. While global supply chain management aims to provide customer satisfaction, sometimes it’s nearly impossible to keep up with the increasing demands from those receiving the goods. There is high pressure of delivering the right quantity and quality for the right amount in the perfect timing and setting. Supply chain providers are expected to readily adjust to the variation of customers. The pressure is too much for them but the fact that clients are the priority before anything else leaves them with no other choice.

Product returns are another threat that can pose challenges to your supply chain. Please see the accompanying resource below for my information.

Infographic provided by KGR Logistics – managed transportation solutions for your business

Incompetent personnel

The supply chain involves a large workforce, because of its long process. Each stage, beginning from the manufacture of the product to the last stage of delivery has its own personnel according to their specialization. However, not all supply chain workers have the talent and passion for their duties and responsibilities. As a result, low-quality service of that particular section is delivered to the clients which affect the overall output of the organization. 

Nothing annoys clients more than the delay of services. No matter how much organized and time-conscious the supply chain provider can be, unforeseen delays can occur any day. Political issues, staff differences, adverse weather, unavailability of resources, time differences among others are the main causes for delay. If one process gets affected, the entire cycle will get disrupted leading to services and goods not delivered on time. 

Looking for reliable business partners

It’s difficult to monitor the business activities, especially the financial records in Global supply chain management. The people assigned for supply, distribution, and partnership are located in different parts of the world. This makes it hard to have an assurance of reliability because some may take advantage of the inadequate surveillance and mess some processes. By the time the culprit is found, the organization would have incurred losses.

Rapid-changing market

The supply chain market is changing rapidly. Technological advancements are occurring daily forcing companies to make changes to align with the latest trends. Digitizing and automating businesses is costly and may require extra effort to adjust. There is a demand for the application of software like 3PL, SOAP, and API, and each organization needs to adapt to the new system to succeed in keeping up with the change. That said, you may want to check and try the Magaya supply chain software platform. 

Communication

Communication is an important aspect of businesses. Poor communication between the providers and clients, the personnel itself, and the organization and its partners greatly affects supply chain management. Supply chain providers should ensure their customers are satisfied with what they receive, and the only way is through communicating to them and asking for feedback. Make sure you reach out to them immediately an unplanned event occurs. The managers, suppliers, manufacturers, and transporters should have a good relationship too. It’ll be easier to solve issues and provide satisfying services in tough times only if they all work unitedly and consider each other’s opinions. 

Inflexibility in adapting solutions

A well-defined company will be flexible enough to apply solutions suggested to them. They find trustworthy sources and work with them in solving any issue that’ll occur in the future. The supply chain manager should listen to all the information represented to them, and interpret it in a way it’ll benefit the organization.

Complying with the international rules and standards

Importing and exporting around the globe includes a lot of regulations. The safety, packaging, and labeling rules vary in different countries. For organizations that are not familiar with such rules, it may be difficult to meet the basic entry restrictions when dealing with foreign supplies. 

Finance and insurance

International transactions are complex compared to domestic. It’s the manager’s responsibility to partner with other members of the supply chain before making decisions concerning the payment methods. It’s also important for the company to acquire the right insurance to offer protection when dealing with foreign property and shipment. 

What should the organization do when the challenges disrupt their supply chain process?

Expect challenges to occur regardless of how much your organization is prepared with solutions. So, what will you do if your supply chain gets interrupted and you need a fast short-term solution? Here are the tips to use;

Reach out to the customers

Being honest with your clients is what you’ll need at such a time. Be transparent with your reasons for the delays, for your customers to understand. Remember to also communicate with your distribution team.

Decide on the decision-making technique

It’s critical to choose what your priority will be. Evaluate your options and choose what needs to be prioritized.

Increase the production and distribution capacity

Examine the effect of the disruption on the financial sector. Doing so will help you plan as needed and make the required adjustments without having extra expenses to cater for. 

The Bottom Line

Once a supply chain challenge occurs, moving forward can be difficult. You’ll have to take critical measures to get back on the right operation mode. Challenges will always take place, but having early preparations will help you prepare in advance for the worst scenarios. 


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