Supply chain management (SCM) is the process by which supply chain activities are managed to have an advantage over competitors as well as maximize the value of our customers. It basically represents the efforts by which the supply chain management solutions help to develop and manage supply chain activities in the most efficient way.
Supply Chain Management Challenges
Manufacturers and retailers are capitalizing on new opportunities like automation and expanded supplier choices. But at the same time, the digital factory boom and an interconnected supply network are adding new risks and complexities. To provide this balanced insight, we canvassed our panel of internal experts and identified the following supply chain management challenges.
Short Product Life Cycles Supply chain management
Short product life cycles create an environment full of risk. There are so many changes that happen over the course of the life cycle, so you will need to carry extra inventory to make sure you have enough products on hand to meet your customer demand. Unfortunately, this means higher carrying costs and a greater risk to your bottom line if the product does not perform the way you expected it to.
To resolve this issue, you need to create several supply chain policies that show the changes in life cycle demand. With these patterns on hand, you’ll be able to compare your plans based on changes in prices and customer segments and/or new markets to find the best results.
Supply chain management Demand and Variety
Consumer tastes and interests are more customized than ever before, and supply chains face the constant urgency to create new products to match the changing preferences of customers. This will lead to more SKUs and shorter product life cycles. Aspects like product development, sourcing, and fulfillment, are more complicated than ever before. Transportation costs are also higher. The better a company can manage their inventory, the better they can meet these demands.
Implementing a quality inventory management software (IMS) will allow you to track the movement of the products in your warehouse. It will provide information so that you can forecast which products you need to restock, and which items have gone dead. With this visibility, you will be able to make better decisions that will save you money and ensure that you are getting the right products to your customers.
Everyday you must be prepared to deal with any possible problems that come your way. You will need to dedicate yourself to finding the right harmony between costs, revenue, and service. For this to happen, you need to collaborate with your coworkers, and unfortunately, getting on the same page isn’t usually the top priority. It can be a struggle to get everyone on your team in agreement. This inability to balance daily decisions can slow down the decision-making process, and hold you back when you need to respond to changes in supply, demand, or capacity.
Lack of traceability
Traceability, or the ability to track the food product through all stages of the supply chain, is now more of a demand rather than a request among many consumers today. Many consumers now want to know where all products and their ingredients, even the trace ones, come from.
This makes it more important than ever to have good data on food products and your supply chain. Having and sharing authentic information from each and every step of the food supply chain enhances food safety, strengthens brand integrity, and increases customer loyalty.
Lack of traceability and transparency, on the other hand, can create blindspots in your supply chain and expose you to unnecessary risk. It can weaken consumers’ trust in your brand, which can translate into lower sales and profits. It can even give rise to certain legal issues that can stall new product launches.
The lack of traceability in the food supply chain is typically caused by companies using outdated systems or traditional paper tracking and manual inspections. These introduce errors and delays into sharing information.
By creating a mutually sound and harmonious relationship with your partners or suppliers, you will be able to provide your customers with products of high standards in a timely manner. This also allows you to create opportunities for improvement in terms of performance.
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