Top 5 Supply Chain Management Challenges Managers May Face

Dustin Caudell
Mon, Feb 27, 2017
Supply chain managers will have a lot of obstacles to overcome this year.,Supply chain managers will have a lot of obstacles to overcome this year.
Supply chain managers will have a lot of obstacles to overcome this year.,Supply chain managers will have a lot of obstacles to overcome this year.

Supply chain managers constantly face problems that can hinder their ability to quickly and efficiently ship products. These issues can have cascading, damaging effects on their entire supply chain and supply chain management strategy.

To run a smooth supply chain, managers must stay ahead of issues by diligently preparing for them. Here are five potential supply chain problems managers may face in 2017.

1. Continued Reliance on Manual Data Processing
More and more companies are turning to mobile data collection solutions to streamline their supply chain and supply chain management operations. The most advanced systems, such as voice-picking solutions, can ensure almost perfect order accuracy, which reduces costly returns, and can improve employee productivity and speed of shipping and delivery.

Many companies still use manual data collection solutions. However, for companies that choose to manually enter and extract data, it's important they keep this in mind: Manual data processing is inefficient and error-prone, while mobile solutions enable managers to pull and evaluate data in real time. This allows them to run operations around the clock online and offline.

2. IT Security Threats
No matter what kind of mobile data collection solution you use to improve the overall flow of your operations, you must do these two things:

IBM's 2016 Cyber Security Intelligence report revealed that 52,855,311 security events took place in 2015. Events are typically defined as some sort of successful or non-successful attack to gain access to a network without authority. And, of the top five industries most frequently attacked by cybercriminals, manufacturing ranked second.

No matter what kind of automated data collection solution you use to improve the overall flow of your operations, you must do these two things: 

  1. Use the best cybersecurity software available. There are countless options on the market, so it's important you compare and contrast products.
  2. Always assess your suppliers, and gauge how strong or vulnerable your supply chain is. If one of your suppliers is in the news because hackers constantly infiltrate its IT infrastructure, it might be time to partner with another company.

3. Trying to Build a Great Team
How do you construct a supply chain and supply chain management team that can adapt quickly to an always-changing business environment? The answer: It's not easy, but also not impossible. Companies need to think about a number of items when building their teams. These include:

  • Division of labor.
  • Experience in supply chain management.
  • A strong understanding how events in the supply chain affect other departments within the company.
  • Cultural expertise, especially since most supply chains are now global.

Building a team takes time, and managers shouldn't rush the process. By hiring the correct employees on the first try, managers can reduce HR costs and decrease mistakes that may hinder data collection processes.

4. Increased 3PL Options
Third-party logistics involve companies that specialize in storing or shipping products. Often companies use these services to save time, reduce costs and increase productivity and space. So why would an increase in 3PL options be a possible issue? Companies could suddenly become overwhelmed with the vast amount of 3PL options presented beforehand, and therefore may be more likely to choose the wrong one. To avoid a contracting disaster, managers must do their due diligence as they research and find the best 3PL option for them. 

5. Cost Control
Operating costs will only continue to rise in the coming years, and managers have to continuously watch how rising technology, fuel and energy prices affect how and when they ship products. Managers must also be mindful of likely minimum wage increases, which can have detrimental effects on a company's bottom line, if it hasn't factored in these hikes to their revenue streams. A recent CBRE Research report, according to Supply Chain Management Review, found that for every dollar wage increase, a 500-employee facility could see a $1 million rise in total annual labor costs. For this company to break even, it may have to either release employees, raise prices or drastically shift how it does business. 

However, companies can better control costs if they used mobile data collection tools because managers can view the flow of data from the supply chain to the company in real time. This can prevent inventory management mistakes which can result in a higher rate of errors and returns. As you might have guessed, this can cost the company sales. These tools can also help employees better manage stock levels to prevent overflow, as well misplaced or lost inventory - both of which can cost the company money.

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