Challenges For Supply Chain Management in 2023 - Problems and Solutions
Written By : Bakkah
2 May 2023
The reliance on strategic supply chain techniques is the key to achieving corporate goals while enhancing productivity and consumption processes.
However, the world faced a critical pandemic crisis in 2020 with ongoing side effects.
Learn more about the supply chain challenges:
What is Supply Chain Management?
One of the most important tasks of supply chain management (SCM) is to improve the process of manufacturing products from raw materials to the production and logistics phase to the last stage, which is to deliver them to the customer.
Supply chain management functions include planning and implementation of raw material, capital and information transactions as well, as identifying raw material sources, managing inventory, and storage, supply chains, or so-called supply chains dividing products and returning surplus or defective goods.
Challenges For Supply Chain Management:
Here are the Top challenges for supply chain management:
1. Data Vision - Supply Chain Planning Functions
Data visibility is one of the most important challenges facing the supply chain because market trends are difficult to predict these days, and it becomes difficult to make any changes unless the data is carefully studied.
Seeing and studying data includes raw material study, packing rates, and production cycle times.
Data visibility extends beyond that, including data visibility made available throughout supply chain management in order to enable effective supply chain planning.
2. Disruptions in Global Supply Chains
The least disruption affects the global supply chains of any organization and even becomes multiplied in any small sector, the magnitude of the impact can be devastating for many sectors, for example, once an epidemic like the new CORONA virus has entered, the world is turned upside down and all global trade balances have been disrupted.
The global supply chain experienced major conflicts in the previous period and in early 2020 production slowed significantly after the emergence of Covid-19, and since then there has been no opportunity to fully recover.
SMEs have been severely affected by the events that the world has witnessed since this time and their significant impact on global supply and supply chains, the world is still suffering from its impact.
The use of strategic risk management planning helps organizations and countries overcome such obstacles, as risk management plans must be comprehensive of all solutions to be met, and plans must be comprehensive solutions for each point in supply chains.
Automation is the key to anticipating the problems and disruptions that the supply chain can face. AMRs can help in:
- Lack of employees.
- Limited production of the institution.
- Low availability of raw materials.
- Safety and concerns employees.
3. Inventory Management - The most Famous challenge for supply chain management
Some companies are very interested in inventory management because of its extreme importance and impact on workflow, but sometimes this approach is counterproductive, for example, when a large amount of data is collected and analyzed incorrectly, affecting inventory management.
If manual processes are relied upon in inventory management, this can lead to major problems, so using automation can be a good option so supply chain managers should change their approach and make it more automatic so they don't suffer significant losses.
Radiofrequency determination (RFID) can lead to an evolution in data visibility. Under this approach, these systems provide a vast wealth of data that helps track inventory accurately.
4. Increasing Customer Expectations
The problem of the epidemic has significantly affected the supply chain amid the continuing shortage of materials and employment, and the rapid change in customer behavior has helped to significantly exacerbate the problem.
With the imposition of home insulation, consumers are becoming more popular with products than ever before, as demand for e-commerce has increased, making them willing to make additional funds to make precautionary measures easier, and this increased spending may increase customers' expectations in the timing of orders and shipping.
Customers at this time do not want to wait for a long time. Even if they are aware of the ongoing unrest, they want to order and receive the products they want within a few days.
Large companies have been able to ship in one or two days, making customers expect small businesses to follow suit. This places a heavy burden on SMEs, for example, small businesses cannot simulate Amazon's shipping times, but customers have not yet realized that consumption fluctuation.
Following the spread of the epidemic, concerns about shrinking customer demand increased, but contrary to expectations, the epidemic did not significantly affect consumer spending, on the contrary, spending increased in certain sectors.
For example, e-commerce flourished during this period, as customers became inclined to shop online and became more sophisticated using artificial intelligence during the closure process. But this type of shopping makes it difficult to predict market changes.
Companies should therefore be able to increase production and keep the customer base satisfied. Strong data collection can help companies understand and adjust to this new normal accordingly.
5. Impact of Productivity on Workflow
Changes in the world can affect the functioning of the world, leading to a significant increase in productivity, as we have already explained the impact of the epidemic on consumer behavior and increased purchasing. However, it is important first to identify the day-to-day processes that cause unacceptable slowdown and how advanced technology can be implemented to solve these problems.
As mentioned earlier, automation has proven to be the most realistic and influential solution. This can be implemented by tracking many strategies, such as fixed industrial scanning, machine vision, and RFID radio frequency identification. Voice-oriented services should therefore be used to help employees increase productivity.
How to Deal with supply chain challenges?
After reviewing the challenges to the supply chain that are changing as global events change, organizations should be prepared for any changes that may arise and affect the workflow.
The supply chain should therefore use all the data it collects to predict ways of working that may help them if there is anything new or accidental that requires a change in business plans.
Companies that succeed in alleviating these challenges will have such a tremendous competitive advantage that the challenges resulting from the epidemic may only completely change the way work is managed.
Benefits of Supply Chain Management
Supply chain management provides organizations with many benefits that translate into higher profits, a better brand image, and greater competitive advantage. These include:
- The ability to predict and meet customer demand.
- Risk management and responsiveness to market requirements.
- Improving the quality of service delivery.
- Increased sustainability, from a community and environmental point of view.
- Improvements in cash flow.
- Provide more efficient logistics services.
What are the Best Change Management Courses?
In the end, what happened from 2020 to 2023 gives an important lesson not only to manage the supply chain by taking all measures and making plans and predictions as much as possible so that they can manage crises faster and avoid problems.