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5 Challenges of Global Supply Management that CIOs Should Know
With increasing international competition, the businesses are dealing with great pressure to keep their pace. The growth of the company relies on its expansion into new markets, but while doing this, it becomes difficult to manage the supply chain. Let's have a look at the challenges that the global supply chain management is facing.
FREMONT, CA: There is no wonder that the world of supply chain management is getting more tangled with each passing day. The supply chain is referred to as a connection between the business and its suppliers to manufacture and distribute a particular product or service to the final buyer. This network comprises of numerous activities, entities, people, data, and resources. It also explains the steps that are taken to take the product or service from its original position to the client. These steps include moving and converting the raw materials into finished products, transporting these products, and finally distributing them to the end-user.
The supply chain management is a critical process as the optimized supply chain is responsible for the cost reduction and fast production cycle of the industry.
There are five global supply chain management trends, revealed by the supply chain executives, which will define the industry in the coming years. According to the reports, the way the companies will manage these challenges will ultimately decide the success or mediocrity of their business.
Below are some of the expected challenges in Supply Chain Management.:
1. Improved Supply Chain Plasticity throughout the Complete Process: The global supply chain management businesses should turn their focus on their efforts towards the enhancement of the flexibility of their downstream and upstream supply chain. This can be achieved by adjusting the overall network design as well as improving the supply chain flexibility. Further, the management of the process and product complicacy need to complement customization at late-stage. The global suppliers and client networks, along with customized products, secure the growth. That is why it has become critical to manage the complexity and globalization of the supply chains.
2. Blending of Supply Chain Organization: The company needs to perform integration of all its functions rather than particular ones for integrating and empowering supply chain organizations. When it comes to the comparison of global with local responsibilities and functional decisions, it becomes essential to deploy the appropriate sets of skills and expertise, just like taking empowered decisions with clarity. Global supply chain organization should be understood as well as treated like one integrated organization. By supporting all the functions of the supply chain, one can reap effective and improved outcomes.
3. Engineering the total price of Supply Chain: The global supply chain management can surpass this challenge of engineering the total cost of the supply chain through the deployment of non-core functions, implementation of regionally-configured supply chains, optimization of total costs of supply chains and processes, and country utilization at low-cost. This challenge emerges because the client needs and competition demand customized supply chains and regional product offerings. Subsequently, the optimization cost of the end-to-end supply chain is critical.
4. Implementing end-to-end Supply Chain Risk Management: This is one of the biggest challenges faced by the global supply chain organization. However, it can be overcome by using appropriate strategies. This is the point where the enterprises should turn towards strategies like demand and supply risk optimization, supplier risk management, working capital, and asset management as well as key partner supply chain risks. In simple words, from demand planning to the extension of production capacity, the opportunity and risk management should compass the whole supply chain. The management should also involve the supply chains of key partners.
5. Improvised Customer Access and Veracity of Supply Chain Planning: For achieving improvised customer access and veracity of supply chain planning, the companies need an improvised point of sale and partnering concepts, end-to-end supply cooperation, response time in optimization and reduction of the supply chain, and real-time demand and supply planning. This challenge comes to picture as there is enhanced supply chain volatility and uncertainty, which is the result of market transparency, reduced customer loyalty, higher price sensitivity, and product commoditization.
The above challenges are difficult to overcome. However, it can be handled if adequate and effective steps are taken. The organizations have to comprehend and analyze each problem and plan an effective strategy to curb it.