Supply Chain Challenges, Lessons Learned and Opportunities

Jul 26, 2022
If the modern world has taught us anything, it is that having a backup plan is the best way to stay afloat. In times of uncertainty, disciplines such as procurement and supply chain management can provide a lifeboat for businesses.

Refteck Solutions and other supply chain consulting firms are here to help your company. In essence, planning your supply chain serves to reduce costs and provide a better response to user demand.

“Procurement and supply chain management
can provide a lifeboat for businesses”

Today's article will look at the current context's past, present, and future. In other words, we will briefly discuss the challenges of supply chain management, as well as the lessons learned thus far and the supply chain opportunities for the future. Logistics and Supply Chain Management

Supply Chain Challenges

  1. Costs Increases
  2. Complexity
  3. Consumers are Becoming more Demanding
  4. Global Uncertainty
1. Costs increases
Profit margins can be jeopardised due to a lack of visibility and accountability. As a result, the costs rise in ways that could have been avoided. The following are some of the factors that have contributed to these high costs:

  • Fuel and raw materials prices are rising.
  • Supplier and manufacturer labour costs are increasing.
  • Storage, transportation, and product management are all very expensive on a global scale.
2. Complexity
An increasingly diverse market requires an increasingly complex supply chain. Companies must overcome obstacles such as user demand adaptation and dealing with multiple sales channels. Everything must be done to ensure that customers receive their products in a timely and satisfactory manner. Supply chain management companies must address sales channels such as:

  • E-commerce stores that require fast delivery and local logistics.
  • Traditional retailers who require warehouse locations near cities as well as proper inventory control to ensure product availability.
3. Consumers are Becoming more Demanding
Because of the market's diversity and the many sales channels, consumers have more purchasing options than ever before. When it comes to purchasing products, the quality and speed of delivery, as well as the price, all play an important role. As a result, experts recommend viewing the supply chain as a service, providing the following to customers:

  • Fast delivery service
  • Quality products
  • Adhere to the relevant legislation
  • Eco-friendly product sourcing, which is becoming increasingly important among consumers
4. Global Uncertainty
We cannot conclude this section without mentioning the importance of factors such as climate change, economic pressures, and geopolitical circumstances. They cause risk and pressure in logistics and supply chain management, resulting in issues such as:

  • A poor coordination among consumers, suppliers, manufacturers, and logistics.
  • A lack of visibility and control makes detecting problems and making decisions difficult.
  • Stronger agreements and controls are required with supply chain organisations.
Procurement and Supply Chain Management

Supply Chain Lessons Learned

  1. Reinforcement of Existing Networks
  2. Enhancement of Communication and Guidelines
  3. Adopting a more Eco-Friendly and High-Quality Approach
  4. Establish a Supply Network Hierarchy (Sector, Sub-sector, Firm Level)
1. Reinforcement of Existing Networks
During the COVID-19 pandemic, rich networks enabled supply chain organisations to identify and successfully address supply gaps in components, services, or skills. This made it easier to pinpoint areas where help was most needed.

For example, a manufacturer seeking a scarce component may be linked to a vendor whose current customer base has shrunk because of the pandemic. This would balance supply and demand while avoiding large profit losses.

2. Enhancement of Communication and Guidelines
This would ensure that the most critical resources and providers are given clear instructions on what to do in the event of a potential global crisis. Furthermore, it would assist other actors who are equally important for the proper operation of a supply chain to receive clear instructions on how to proceed.

3. Adopting a more Eco-Friendly and High-Quality Approach
The pandemic must serve as a turning point for us to move forward for the better, not for the worse. In this regard, experts advocate for a future supply chain that is more resilient and environmentally friendly, with a high capacity for innovation. It's committed to a more cautious approach to the environment, always in accordance with regulations, ethics, and security concerns.

4. Establish a Supply Network Hierarchy (sector, sub-sector, firm level)
It’s critical that supply chain management has a hierarchy with three levels: sector, sub-sector, and firm level. This improves not just the visibility of product and resource flow, but also communication. Furthermore, the hierarchy offers an extra degree of control to eliminate imbalances caused by global issues. Supply Chain Opportunities

Supply Chain Opportunities

  1. Application of Emerging Technologies (AI, ex)
  2. Use an Agile Method
  3. Implement Supply Chain Metrics (KPIs)
  4. Expert Training
1. Application of Emerging Technologies
When discussing the use of emerging technologies, two must be mentioned:

  • Artificial Intelligence (AI)
  • Automation
The most difficult tasks can be solved more easily with AI. While automation allows for the optimisation of repetitive or time-consuming tasks. Furthermore, using cloud technology allows you to work from anywhere at any time. As a result, it would improve communications, keep inventories current, and allow for more fluid work.

2. Use an Agile Method
As previously discussed, the key factors for success are sustainability, efficiency, and adaptability to users and sales channels. Adopting an agile methodology entail having a better team and technology to make more informed and timely decisions. Both stakeholders and customers will see their procurement expectations exceeded in this manner.

3. Implement Supply Chain Metrics (KPIs)
Increased visibility is one of the opportunities in supply chain management that has opened for us. The use of KPIs (key performance indicators) and other metrics would help in the establishment of goals and benchmarks. The measurement and monitoring of these KPIs would assist businesses in choosing a more cost-effective and high-quality approach.

4. Expert Training
Even though supply chain management is not a field of study, businesses should be concerned about training their employees in this area. It is extremely difficult to find a professional who fully understands the procedure, and it takes many years to obtain this training. As a result, businesses should seek out the best candidates for the job and provide ongoing training to them. Having a supply chain expert in your company would give you a significant competitive advantage.

We can help you boost your business

Finding the best supply chain management solutions for your company can be time-consuming and difficult. It's a complex area that requires an expert to guide your company to its objectives. Refteck Solutions is always looking for the best for your company, implementing innovative and cost-effective strategies. Contact us today to learn more about how we can collaborate with you.

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