Supply chain management is a challenging job. It not only requires you to keep track of all the processes in your business, but also means that you have to anticipate problems before they can snowball into bigger issues. Once a problem occurs, it can cause massive disruptions in your supply chain and lead to significant financial losses for your company. To prevent this from happening, you must hold a professional diploma in supply chain management and logistics or at least a supply chain certification to advance your career, so you are aware of the key supply chain issues that commonly occur, their consequences, and how you can tackle them before they get out of hand. Read on to know more about these five common supply chain issues and tips on how to deal with them if they happen in your business.
1. Inventory Issues:
A key supply chain issue that can seriously disrupt operations is a lack of inventory. If you don’t have enough inventory at the right location, it can cause massive disruptions in your supply chain. For instance, if you don’t have enough inventory at your retail store or manufacturing plant, you may have to turn away customers or stop production. If your supply chain is weak or there is no proper inventory management in place, it can lead to shortages, which could seriously affect your business in the long run. You can prevent this issue by having a proper inventory management system in place, which helps you in tracking inventory levels and prevents out-of-stocks. A few ways to tackle inventory issues if they occur in your supply chain includes re-scheduling orders and expediting deliveries to avoid out-of-stocks, and investing in a warehouse management system that tracks and forecasts inventory levels.
2. Product Quality and Vendor Management:
Another major supply chain issue that can cost your business a lot in terms of time and money is product quality issues with vendors. If you source your products from vendors who don’t meet quality requirements, product quality issues can happen and disrupt your supply chain. For example, if you source products from a vendor who uses poor quality packaging, the products may get damaged during shipment and will affect your customers. To prevent these types of issues, it is important to carry out proper vendor due diligence, which includes checking a vendor’s legitimacy, experience, product quality, and track record. These include first-party checks, second-party checks, or third-party audits and inspections. You should know the supplier relationship management skills to consider using a risk-based supplier selection framework to prioritize vendors based on their risk level and ensure better product quality.
3. Transportation Issues:
One of the key supply chain issues is poor transportation management, which can disrupt your supply chain and cause significant financial losses. Poor transportation management can occur due to issues like late shipments, poor vehicle maintenance, or theft. A few reasons why transportation issues may happen include bad traffic conditions, a driver who is too young or too old to drive, extreme weather, or a driver who is under the influence of drugs or alcohol. To prevent these types of issues from happening, you should have a transportation management system in place, which keeps track of shipments and sends an alert when there is an issue. You should also partner with a third-party logistics company (3PL) who has the required licenses and experience to handle your freight.
4. Facility Reliability and Maintenance Issues:
One of the other supply chain issues that can significantly impact your business is the lack of reliability in your facility. Facility issues such as power outages and natural disasters can disrupt your supply chain and cause significant financial losses. To prevent these issues from happening, you should ensure that your facility is reliable and has the resources required to deal with emergencies. For example, you can install a backup generator to prevent power outages or install flood barriers to protect your facility during natural disasters. To tackle these issues if they happen, you can work with a 3PL or logistics service provider (LSP) to help you manage these issues. An LSP can help you in rerouting shipments, expediting goods, and finding alternate facilities.
5. Communication Breakdowns:
Communication breakdowns can cause a great deal of disruption to your supply chain. For example, if your staff members don’t communicate about critical issues such as maintenance issues, product quality issues, or inventory problems, it can lead to supply chain disruptions. To prevent communication breakdowns from happening, it is important to have a proper communication process in place. This includes having a communication policy that clearly communicates expectations from staff members. To tackle communication breakdowns if they occur, you can conduct communication audits to understand the communication process and find out if there are any gaps in your communication process.
Final Words: How to Prevent these Supply Chain Issues?
In order to prevent these supply chain issues from occurring, you should always be on the lookout for weaknesses in your supply chain and take corrective action at the earliest when you find a problem. You should also have a backup plan in place in case an issue arises. You can also proactively take steps to prevent these issues from occurring by investing in better technology, hiring the right team, and adopting the right supply chain management strategy.