Article

Current trends and challenges in supply chain management

3 key supply chain management challenges and how to solve them

Managing supply chains was already a difficult job before COVID-19. Now it’s even tougher.
According to a global Resilience360 survey of supply chain professionals, every respondent said demand shocks and surges would remain a major challenge, at least in the near future. And 97 per cent of them identified supply shortages as an ongoing issue.

At the same time, organisations are under pressure to reduce operational costs, while seamlessly delivering products and services to customers.

This all means it’s critical that supply chains are resilient and efficient, but that is of course easier said than done. Here are three solutions to some common challenges that organisations need to overcome to improve their supply chain management.

1. Eliminate manual processes while ensuring compliance with purchase policies

It’s impossible to achieve resiliency and efficiency if many of your supply chain processes are highly manual.

Consider all your suppliers and all the different processes needed to source and purchase goods and services from them. Then consider how many people are needed and how long it takes them to perform tasks within those processes. And, of course, physical paperwork adds more work and time for your teams by duplicating data entry.

The answer is to digitise your supply chain by consolidating disparate systems into one solution. That should include the entire source-to-pay process, from initial requisition to order approval and receipt of goods and services.

An integrated digital supply chain management solution can greatly simplify tasks such as ordering and inventory management, while ensuring compliance with purchase policies through embedded workflows and approvals.

2. Reduce errors and discrepancies

If your organisation uses multiple systems and manual processes for managing its supply chain, you’ve probably got a well-staffed procurement team keeping track of purchases and enforcing policies, among many other duties. And even then, you’re hoping any errors or discrepancies are going to be minor.

But the fact is even small supply chain errors can have a devasting effect – like when Boeing had to delay the launch of its 787 by years due to a litany of supply chain glitches, such as running out of fasteners.

An integrated digital supply chain management solution enables you to automate processes and embed workflows to increase efficiency and accuracy. It can, for example, automate stock replenishment.

Such a solution can also exchange electronic data with your suppliers, so you can remove paper-based processes and data entry duplication, reducing the likelihood of errors. It can simplify purchase requisitions by allowing staff members to order directly from suppliers’ web catalogues – but from within the system to ensure compliance.

3. Gain full visibility of expenditure and commitments

For your supply chain to be resilient, it has to be agile enough to quickly respond to supply and demand volatility. But to gain that agility, you need to have end-to-end visibility of the entire supply chain. And that visibility is simply not possible if your supply chain is managed via a series of unconnected systems and manual processes.

With siloed systems, getting a clear picture of the supply and use of goods and services is difficult and time consuming. Assessing risks and planning ahead for purchasing decisions are frustrating exercises.

A digital solution can capture details of all supply chain activities and transactions across the enterprise. But not all digital systems offer the end-to-end visibility needed to ensure your supply chain is agile. This requires a supply chain management system that’s fully integrated with your financial, inventory and other enterprise systems.

An integrated system will give you access to real-time data from the entire supply chain. It can provide dashboards and reports with instant insights into expenditure and risks. You can even drill right down to individual orders, allowing you to act on problem areas earlier.

Publish date

18 May 2021

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