Challenges of Modern Age Supply Chains

In today’s fast changing world, it is important for industries to keep up with the dynamic demand. The supply curve should dynamically shift in accordance with the demand curve. The response time of the organizations to these changes determines the success or failure of the organizations in meeting customer demands. Given below are the different steps in the process.

Analyze the problem

It all depends on the time taken by the stakeholders to quickly and effectively understand and respond to evolving situations. Figure 1 shows the different factors to be considered in order to effectively deal with change.

Figure1: Factors to deal with change

Choose the best action

Once the problem has been analyzed, the next step is to quickly simulate the various alternatives available and analyze the impact that each alternative would have. Then choose the best alternative among the options available. For this it is important for all the actors and stakeholders in the supply chain to share a common view and understanding of the present and future state of the market and then coordinate towards a collaborative supply chain response. Firstly, the occurrence of cascading events as a result of this event should be analyzed. Secondly, check the immediate effects on the current operations that the event would have. Finally, see who would be impacted by the change and involve those actors in the decision making process.

Reducing the correction time by collaboration

 The solution to a change should be organization specific and not specific to a particular business unit in the organization. If the solution is specific to a single unit in the organization, the solution may not be feasible for the other units of the organization and would increase the implementation time leading to customer dissatisfaction. Hence it is necessary to have collaboration across multiple functions, multiple tiers of business and have a consensus driven decision making process.

Amidst all this, the biggest problem faced by manufacturers today is that of customization. Customers’ demand for customized products is going up. Ho do organizations get these customized products to customers in the least possible time?

References:

http://www.kinaxis.com/en/solution/supply-chain-management-solution/supply-chain-response-management/

http://www.slideshare.net/kwatson/5-secrets-for-21st-century-scm-1518151