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Monday, November 4, 2013

The Five Most Common Supply Chain Management Challenges


Periodically we ask our practitioner members for their key supply chain challenges. This list changes over time, here is our current top 5:
  1. Unable to apply the right metrics to manage supply chains effectively

    By far the most 'popular' challenge, finding and implementing the right metrics remains a problem in supply chain management. This includes disputes about the right metrics between supply chains, product lines or departments within a company, agreeing on definitions and calculations, having too many metrics or too few metrics, difficulty benchmarking and difficulty finding metrics that are supported 'of-the-shelf' in reporting tools.
  2. Difficulty prioritizing supply chain improvement efforts

    Companies struggle to identify where to deploy their expert resources and in what sequence. Problem solvers are scarce, you want them to work on those problems that have the biggest impact on your supply chain performance. This includes lack of a standard approach (every group has their own methods with varying results), internal politics, lack of fact-based prioritization, capabilities/skills are limited to few key individuals.
  3. Performance is lagging
    Whether you are driven by the need to reduce costs or inventory, need to improve customer satisfaction, or want to increase the speed to respond to market changes, performance gaps continue to make it on our top 5 list. Do you know how to improve the performance of a lagging metric without negatively impacting your other key metrics?
  4. Complexity of supply chains

    Serving many different customers with a wide varity of products and services may result in a complex, global, network of suppliers, factories, warehouses, transporters, customers and others. The complexity of such a network is hard to unravel and makes it difficult to find where and why problems occur. This includes challenges like: "We don't know what our supply chains are", "What is the right number of supply chains?", the desire to standardize processes.

    You are not alone, many of our member practitioners have complex businesses. Those that excel at supply chain management know how to segment products and customers in order to develop and maintain the right supply chain strategy, network, processes and resources
  5. Finding and holding on to supply chain talent

    Although supply chain management is now a generally accepted and understood function in a company, it is difficult to find true supply chain talent. Supply chain management covers multiple disciplines and it can therefore be difficult to find that all-round supply chain person. How many people in your organization have deep and wide knowledge of planning, sourcing, manufacturing, distribution and order management functions? How many can see the supply chain as a whole? This includes problems like finding the right people, reducing attrition and developing hiring, training and redeployment plans.

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