Introduction-
Supply chain management helps enterprises keep a detailed track of the movement of the raw materials from place to place. Raw materials are used to manufacture goods. Raw materials also benefit from having an inventory control level, which leads to a reduction of costs. It also leads to the manufacturing of goods and services supply to satisfy the expectations of customer demand. Supply chain management is the efficient management of supply chain activities to have an advantage over competitors and maximise the value of the customers. Supply chain management represents the efforts made to develop and properly manage supply chain activities most suitably.
Issues faced in supply chain management-
When we refer to supply chain management, we also represent the sourcing of raw materials, good quality of goods and logistics, and the management of products. Supply chain management enables enterprises to maintain visibility over their logistics to ensure the availability of materials and delivery of products to customers. Effective supply chain management also helps enterprises avoid stoppages in production. This is done by identifying areas in which there is a single supplier. Supply chain management provides enterprises, especially manufacturers, with many business advantages. By knowing the activities involved in the supply chain management, we will get to know and identify the possible challenges and issues faced by it so that we can derive solutions for it.
- The flow of cash- The management of the flow of cash is very crucial. But keeping the perfect and accurate track of cash flow is a difficult and hectic and complicated task in global logistics and supply chain management. Businesses must keep a check on and plan for several expenses. But it is difficult to know when and where to allocate the resources. The business must know how much it will cost to get the products to the door of their customers, including shipping, storage, manufacturing, packaging, freight forwarding, distribution, marketing, and sales. Planning is very important. The business needs to prepare a detailed chart about future expenses that may be incurred. And then take proper precautions and preparations.
- Much expectation- The customers expect faster delivery of the product. However, global supply chains often measure shipping times in weeks and months. These long lead times make it challenging to balance supply and demand effectively.
- Late delivery- The long lead times will ultimately make your shipments to delays. So many steps are followed in the global supply chain and such large distances for goods to travel, there are many processes which go wrong causing the late delivery of products.
- Issues of quality- The quality-related issue is very challenging. The businesses must consider the differences in defect levels in countries. Businesses need to clarify the quality level expected and the percentage of acceptable defects ahead of time.
- Data management solution- To effectively manage the global supply chain, businesses must use and customize a suitable data management solution.
- Risk- Many countries give inexpensive labour comparatively. The manufacturing costs have less stable governments and currencies. The changes in policies of the ruling government can often affect supply chain management. Businesses have very little control over these unforeseen factors, so it’s best to stay prepared for every unforeseen situation and risk. Agreements and contracts with suppliers, manufacturers, and freight forwarders should be made in another region or country.
- Barriers of language- Another limitation is that many countries will conduct day-to-day operations. And the people of different countries communicate in a different language. These types of issues can be managed by appointing professional communicators with industry knowledge. The business can always use the mode of writing for clarifying expectations.
- Different places- Different customers live at different places and can be from different countries. The difference in time between the centre of America and central China is 15 hours. There is huge no overlap in working hours. Communication happens via email and messages. You have to wait till the next day to receive a valid reply or an answer. This is very challenging to look after the technical things of the process of production.
- Transaction costs-The Exchange rates very fluctuate and changes from time to time. Even the small changes in foreign exchange rates can ultimately lead to an increase in costs. Some countries which are in the development stage may offer cheap labour rates. They have unstable currencies. Another consideration is the high cost of international transactions when using a bank. These fees can quickly add up and hurt your margins.
Conclusion-
Supply chains may have several issues, but they manage to solve the issues with different solutions. Efficient supply chain management is needed. Otherwise, we do not get products on time. Supply chain management is the efficient management of supply chain activities to have an advantage over competitors and maximise the value of the customers.
