Question

Discuss the contemporary issues in supply chain management and show the implications of each to the field/profession of SCM

Answer 1

Supply Chain Management

Supply chain management is the management of the flow of goods and services and includes all processes that transform raw materials into final products. It involves the active streamlining of a business's supply-side activities to maximize customer value and gain a competitive advantage in the marketplace.

SCM represents an effort by suppliers to develop and implement supply chains that are as efficient and economical as possible. Supply chains cover everything from production to product development to the information systems needed to direct these undertakings.

Challenges in Supply Chain Management

• Reduced inventory goals require flexible, high-velocity manufacturing strategies that can
• Reduced inventory goals require flexible, high-velocity manufacturing strategies that can enable a quick response when unexpected changes in demand occur.
• Expanding distribution systems across the national boundaries and becoming global.
• Enterprise performance analytics needed to help improve planning and optimize decision making.
• Rapid, based collaboration and procurement
• Increased driven (transformation from “push” to “pull” operations) Collaboration and closed-loop planning environment necessitates clean, synchronized data
• Disconnected demand, supply, and financial plans make it difficult to reconcile plans with reality, and to re-plan accordingly.
• Multiple echelons and constraints in global, distributed supply chain requires incisive collaboration and instant visibility of critical planning data.
• Increasingly complex supply chain processes impede best-practice decision-making and management of data transfers.

Contemporary Issues in Supply Chain Management and its Implications

1. Quality Customer Service The supply chain management is centralized on the needs of the customers. It is about giving the right quantity and the right quality of the product for the right amount of money. All this, in perfect timing and setting.

• Suggestion: It might seem simply, but on the contrary, it isn’t. Customers have different preferences and we have to always adjust to the customer’s needs. Being able to provide customers unique solutions make a difference entirely. Companies that actually excel in this field are the ones that make an effort to learn and invest in new technologies.

2. Costing: Globally speaking, the costs of raw materials, energy and labour have increased due to economic constraints. In order for operations to continue production and provide customers with good quality items at affordable rates, adjustments have to be made to keep operations running.

• Suggestion: The best solution to this issue would be improving your cost control by executing your plans efficiently through constant monitoring. Through efforts in providing warehouse efficiency you would be able to do so.

3. Risk Management Due to the constant change in the market, coming from a variety of sources such as consumer demands, political agendas and global sourcing, would cause major issues to the operations.

• Suggestion: Always be prepared with a risk management plan, on how your company will be able to overcome disruptions during the course of operations. By hiring a logistics software development company you would be able to manage these issues effectively with less effort on your end. After all, logistics management is vital to the entire operation.

4. Supplier Relationship By creating a mutually sound and harmonious relationship with your partners or suppliers, you will be able to provide your customers with products of high standards in a timely manner. This also allows you to create opportunities for improvement in terms of performance.

• Suggestion: By building a strong working relationship with your supplier, you would be able to work efficiently and come up with a better output in a short period of time.

5. Qualified Personnel Over the years, it has become a challenge to find talent interested and passionate about this line of work. Personnel hired in this field must have an understanding about the duties and responsibilities needed.

• Suggestion: Since locating dedicated personnel to work for this field has become increasing hard to find, their market value will start to rise. Hiring and promoting through in-house staff would be the most affordable solution at this point.

6. Unforeseen Delays Procurement of materials and products may be easy, but the delivery may not always be 100% on time, especially with time differences and a variety of shipping time frames. When items are sourced from different countries, delays like this are very common.

• Suggestion: Always have buffer stocks. Through an efficient warehouse management system, you are able to know when you need to have certain materials delivered as well as create a time cushion in terms of delivery to make sure everything runs smoothly.

7. Fast-Changing Markets: With technological advancements changing our markets every day, it is quite difficult to stay in pace and adapt to the variety of innovations in the market. But because the goal is to stay efficient in these changing times, companies would have to be more flexible.

• Suggestion: Change is inevitable. The way we adapt to change is definitely something we need to manage by using logistics management software. We are able to move with the flow and improve our output as a whole.