The path from raw materials to products being sold is the core of a company’s operation, and making it run as smoothly as possible is the goal of supply chain management. This task includes maintaining clear communication with suppliers and manufacturers, assessing production and transportation costs and predicting market behavior and being ready to respond. The ever-changing market presents many challenges, some of which will require particular attention as supply chains and the markets they serve become more complex.
Companies have increasingly set their sights abroad when planning out supply chains, sending manufacturing overseas to lower production costs and taxes. This comes with a distinct drawback, though: transporting materials and products across the network becomes more demanding as it spreads out, compounded by rising energy and fuel costs. Additionally, labor and trade regulations vary between nations and companies must make sure to abide by the regulations of each region they operate in.
Though advances in fabrication, communication and transit have made quality goods and services more accessible, this, in turn, results in high demands. Consumers expect high-quality products that are fairly priced and readily available. These three expectations are always at odds with each other, and supply chain managers must make judgment calls on how to balance them. This is compounded by consumers’ changing desires; solidtools are needed to predict how the market will shift, and the supply chain needs to be adjusted to match.
Expanding Data Channels
Data is everything in today’s interconnected world. Companies have potential access to more data than ever before, from sales counts and market trends to consumer opinions and values. This also includes internal data like the inventory of shipping facilities, the transit time of materials and more. As valuable as this data can be, handling all of it is a challenge in itself; your business will need a plan for consolidating these various data channels and collecting the most significant data for risk analysis, supply and demand planning, etc.
Rising Costs of Risk
As companies and their supply chains scale up, the risks of failure do so as well. A product recall or a forecast made in error can lead to heavy costs, especially when the supply chain needs a major upheaval to address product faults. These magnified risks can lead to. However, instead of avoiding risk altogether, this situation calls for more refined analysis to better decide what risks are worth taking.
Growth and complexity go hand in hand, and a growing business has much to pay attention to regarding its supply chain. With the right tools, expertise and insight, though, you can be ready to face these challenges.