Executing supply chain excellence strategies can make
favorable contributions to return on assets, margin, improved customer service
and competitive advantage while generating more reliable metrics by which to
measure success and foresee trouble spots. Executives should be aware of
the top challenges they will face as they make changes to their supply chain
operations.
Continued
complexity being added to supply chain operations. As
more technologies, processes and “red tape” continue to be layered onto their
operations, companies increase their costs of doing business and create
confusion about what must be done to realize the corporate objectives and
vision. Companies must be vigilant about finding and stamping out unnecessary
complexity wherever it exists—for instance, identifying ways business or
operating units can share common processes and technology platforms.
Overlooking
the continued growth of e-commerce as a channel in the industrial sector. As sited by The Chief Supply Chain Officer Report in 2013, more
than half (55 per cent) said the demands of e-commerce and mobile-enabled
consumers are increasing the number of stock keeping units they have to
support. Almost 55 per cent reported they are building new distribution centres,
and 48 per cent are building direct-to-customer fulfillment capabilities.
However, to avoid being the next Borders, small and midsize industrial
manufacturers and distributors must take ecommerce seriously. That means
building multi-channel fulfillment networks that can simultaneously process
orders from multiple ordering channels and fulfill them from the source that
provides the highest level of customer satisfaction and the lowest fulfillment
cost.
Inattention
to potential risks. An inability to
define potential risks and develop mitigation strategies for those risks that
have a high probability of taking place could jeopardize business continuity
and profitability. With the globalization of manufacturing operations,
having a global procurement network that can support and react to your
supply chain needs is important. One of the very trends that has
increased supply chain risk – globalization – also provides opportunities to
manage that risk.
Safety and
quality products. The pressure on
manufacturers to produce high-quality products that are safe is an
increasing challenge. The number of product recall cases is growing each
day. It can damage a company’s reputation and is expensive to its bottom line. Following
the horse meat scandal, safety and quality incidents are at the top of the risk
index, with 37 per cent reporting that they are “very concerned” about this
for 2013-14 and 35 per cent are “concerned”.
Unrealistic
assumptions that supply chain management technologies will fix everything. Access to the latest technology in
various fields by having the right experts has proven to be a great
support in new product development. However,
for technology to work most effectively, a company must have an explicitly
stated and shared corporate vision and mission—not just among external
customers and service providers, but also internal constituents involved in the
supply chain, including warehousing, transportation, and sales.
In
addition to the challenges discussed above, in 21th century supply chain management,
an executive might also need to facilitate
career progression, developing new production skills and demonstrating a return
on investment is a further issue; continue to reduce costs while improving
customer service and supporting expansion in new markets and product lines. The bottom line is that while the
executives have to deal with all these challenges, they should not ignore that
it might also be possible for them to search some new opportunities at the same
time, such as they might be able to use global souring to minimize risks and try
to control supply chain disruption.
Here
is a short video about a supply chain academy. Speakers focused on supply chain
agility and the key importance of resource management, how to develop a
strategic supply strategy to achieve sustainability of supply and the
challenges of social and environmental compliance with the need to have a keen
relevance in a volatile global commercial market place.
Reference:
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