Understanding common supply chain problems

When you run a business at any point in the supply chain, you likely have some familiarity with what causes delays and other issues that impede your efficiency. However, being able to look at those problems internally is one thing - being able to identify and understand what's at the heart of such an issue with your partners is another entirely.

With that in mind, it's important to remember that not every problem is the result of someone making a mistake or general inefficiency, but rather that many stem from common issues that are inherent to the logistics sector as a whole, according to the MIT Sloan School of Management. For one thing, there are many risks that no one in the sector has control over, such as political, macroeconomic and regulatory changes that impact almost every business. When these crop up, they force companies to change how they do business - and some may be in a better position to pivot than others.

It takes planning to overcome supply chain problems.It takes planning to overcome supply chain problems.

Moreover, the complexity of the supply chain as a whole is growing rapidly, and the ways in which successful businesses did things even a year ago may not be optimal in the modern logistics sector, the report said.

"In today's volatile environment, speed and agility are equally or more important than cost. We need to learn how to balance the day-to-day delivery of results with the efforts to become resilient organizations," Luis Nava, senior director of global sourcing and manufacturing at Converse, told MIT.

Nailing down the issues
The big picture for any company in the supply chain may indeed boil down to cost certainty, according to Blume Global. It's not always easy to anticipate fluctuations in the cost of fuel - which is built into other prices - and the same is true of raw materials for manufacturers. What is more certain for these businesses, but still needs to be carefully accounted for, is the cost of labor both internally and externally, as well as the cost of maintaining and operating facilities.

Moreover, because consumers increasingly expect the fastest possible turnaround times on deliveries they receive, companies dealing with last-mile logistics need to be as responsive as possible to changing demands, the report said. That means not only delivering packages promptly, but also providing high-quality service before, during and after that delivery.

It's about partnerships
Every company in the supply chain must deal with other businesses to function effectively; the more they can all do to collaborate, share information and generally build better relationships, the better off all involved will be, according to RBW Logistics. It's not always easy, and it's certainly not frustration-free, but greater transparency and standardized measures of success go a long way toward ensuring ongoing efficiency for everyone.

With all these things in mind, supply chain managers would be wise to try to improve their existing partnerships while building contingency plans that will help them react nimbly to any issues that arise in the future.

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