There is no doubt that the world of supply chain management is becoming increasingly complex. Supply chain executives have revealed five global supply chain management challenges that will define this industry over the next few years. Reports say that the ability to manage these five challenges successfully will eventually determine the success or mediocrity of a business.
Here are some expected challenges in Global Supply Chain Management:
1. Improved Customer Access and Accuracy of Supply Chain Planning – In order to achieve improved customer access and accuracy of supply chain planning, companies require improved point of sale and partnering concepts, real time demand and supply planning, end-to-end supply cooperation and optimization and reduction of supply chain response time. This challenge arises because of increased supply chain volatility and uncertainty resulting from market transparency, greater price sensitivity, reduced customer loyalty and product commoditization
2. Enhanced Supply Chain Plasticity across the Entire Process – Global supply chain management organizations must concentrate their efforts on boosting the flexibility of their upstream and downstream supply chain through adjustments of the overall network design and improvements to their supply chain flexibility. In addition, management of the process and product complexity is necessary to complement late-stage customizations. Securing growth requires global suppliers and customer networks, as well as customized products, which is why the complexity and globalization of supply chains needs to be managed effectively.
3. Engineering Total Cost of Supply Chain – Global supply chain management operators can surpass this third challenge by outsourcing non-core functions, implementing regionally- configured supply chains, optimizing total supply chain costs and processes and low-cost country utilization. This challenge comes up because customer requirements and competition entail tailored supply chains and product offerings at a regional level. Subsequently, optimizing end-to-end supply chain cost is critical.
4. Implement end-to-end Supply Chain Risk Management– It is one of the greatest challenges for global supply chain organizations but it can be conquered as well with adequate strategies. This is where companies must optimize demand and supply risk, manage supplier risk, and optimize working capital and asset, as well as key partner supply chain risks. The point is that risk and opportunity management should span the entire supply chain, from demand planning to expansion of manufacturing capacity and should also include the supply chains of key partners.
5. Integration of Supply Chain Organization – In order to integrate and empower supply chain organizations, you need to perform integration across all functions not just particular functions. In addition, the ability to deploy the right skill sets and expertise is just as important as empowered decision making with clarity, when it comes to global versus local responsibilities and functional decisions. Global supply chain organizations should be perceived and treated as a single integrated organization. Effectiveness and improved outcomes result from supporting all functions of the supply chain.