The implementation of supply chain management (SCM) can be both beneficial and challenging to your business. Determining supply chain challenges before they happen is critical to SCM success, as the failures and successes are extremely visible to your trading partners. In order to achieve successful implementation of SCM, take note of the following supply chain challenges:
- Don’t Assume SCM Technology Fixes Everything
SCM technology does many things, but it cannot do it all. One of the most unrealistic assumptions is that SCM technology will help you control your supply chain and vendor resources. Before you rely too heavily on SCM technology, you must first have a specific level of organized control within your supply chain relationships. Supply chain management technology is most effective when you have the ability to control your logistic providers and trading partners.
- Don’t Use the Past to Predict the Future
Relying on past performance to predict future sales can cause big problems. Instead, track actual sales as they happen; the supply chain network will react quickly to any changes in consumer trends. This tactic is particularly beneficial in a retail supply chain, when the item being sold is unremarkable and can be purchased from a variety of retailers.
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- Don’t Rely on Sale Data
Never rely soley on sale data when making critical decisions. It’s important to understand and utilize real- time inventory levels, cash flow and financial ratings when making critical supply chain decisions. If you maintain your supply chain metrics, you’ll avoid making partnership errors with both suppliers and customers.
- Don’t Forget to Communicate
Another common supply chain challenge is lack of communication. Both suppliers and customers need continuous monitoring, as well as collaboration to ensure supply meets demand. Nothing can replace face-to-face communication; by fostering personal relationships with both customers and suppliers, the entire supply chain process will be embraced by all.
- Don’t forget about a supplier’s capability
One of the more difficult aspects of supply chain management is trying to understand the full capabilities of your suppliers. By understanding what a supplier can do during critical times can greatly increase your response time to changes in demand. Skilled supply chain managers will often review lead times, burst capacity, standard capacity and quick turn capabilities with their suppliers to ensure the supplier’s capabilities meet the needs of the company.
It is critical that you are proactive about any issues that may derail your SCM efforts. If you focus on impending issues and supply chain management best practices, you’ll have the ability to deliver solid results, substantial benefits and concrete financial savings.