5 Supply Chain Management Issues that Hurt the Bottom Line

Mar 10, 2020 Shawn Mack Shawn Mack

Reliable and efficient supply chain management is the key to success for many businesses. However, on-going labor shortages and limited availability of storage places are making today’s supply chain environment tougher than it has ever been. There is little room for mistakes, and it can be very difficult to identify and address the supply chain problems

This is why successful businesses conduct supply chain analysis to develop a better understanding of the different processes that are involved and identify potential bottlenecks in advance to take the necessary steps. 

In this article, we are talking about five common supply chain issues that can cause big trouble for your business if overlooked. So let’s go ahead and get started.

No Inventory visibility

This is number one on the list. If your supply chain management fails to provide a good picture of what is and is not in stock, and when and how it gets replenished; it is not performing one of the key functions.

Running out of stocks, especially if you are an online store, can have a major impact on your business. One of the best ways to go about this is to use a robust distribution software that helps you keep track of your inventory levels and place orders soon as you hit a replenishment level. 

You can even look for cloud-based options that can bring down the deployment costs for these software solutions and choose between different options that best suit your business model. 

Lack of flexibility in supply chain management

 



In case of an unforeseen event, your supply chain management process should have enough flexibility to manage things without creating major disturbances. Designing a flexible supply chain isn’t as easy as it sounds, and requires creativity. 

Apart from maintaining a good relationship with all your vendors, you need to have good leadership in place that ensures your business manage effective collaborations up and down the organizational hierarchy.

Inadequate resource utilization

From selecting warehouse layouts to defining routine practices, inadequate resource utilization can be a big problem in logistics. Often businesses that are selling products globally spend more time analyzing their storage spaces and figuring out ways that will help them lower transportation costs.   

Enterprise Resource Planning (ERP) software can offer great help in addressing situations like these by providing a new perspective on to effectively use existing resources. You can consolidate multiple data streams on a single platform using the ERP software and get a better picture of your company’s supply chain health. 

Use of old and outdated tools

Replacing old, inefficient vehicles and machinery can be quite expensive. But using outdated equipment costs even more, as it results in increased material consumption, lower efficiency and serious safety issues. 

While only a few businesses are up for this challenge and run periodic checks to ensure they are using up-to-date machinery, others even fail to identify under-performing equipment. 

Using a powerful ERP Software can put an end to a lot of these problems by running technological audits and identifying potential items that require your attention.

International 

Running a single location-based outlet is much easier than managing a business that sells globally. Operating from multiple international locations increases the complexity of a logistics operation. Trade regulations, custom protocols, taxation, exchange rates, and political instability can all affect how your company ships and sells across borders.

Addressing these issues is a big challenge for businesses aiming to enter the internal market and, all too often, they run into stalled growth and weak plans. 

Strong networking plays an essential role here. Businesses that can find supply chain partners in their targeted international markets operate successfully. Building cross border logistics connections can require a great deal of time and effort, but the returns can quickly recover your investment.

For businesses that don’t have the capacity to create a big international network, they can work their way through a freight broker or carrier that can help them with that. The global supply chain has evolved over the last decade, and it shows no signs of becoming less complex. 

Address these five bottom-line issues can help your business run a smooth supply chain process that promises growth and effective performance in different markets.


Shawn Mack is a content writer who offers ghostwriting, copy-writing, and blogging services.His educational background in business and technical field has given him a broad base from which to approach many topics. He is also fond of writing interesting blogs on technology & digital marketing related topics. He occasionally writes blog articles for Techloner.

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