Modern supply chain management is constantly evolving to improve managerial efficiency. In the highly competitive market, fixing up the loose ends in the supply chain and adapting with the market demand is a key focus area of inventory management.
Globalized markets are not only dynamic but also highly challenging. Overnight preference changes, international intricacies, cost management, and several other factors constantly create turbulences in the markets and thus, create challenges for supply chain management.
Thus, here are some of the major challenges that the modern supply chain management is facing in contemporary economies.
A series of rising operating costs
A series of rising supply chain costs is a major challenge faced by supply chain management throughout the globe. In other words, the management costs are increasing at every stage of the supply chain. Also, the unavoidability of these factors makes the situation worse.
One of the biggest allies to this problem is the rising operating costs, some of which are as follows:
• A steep rise in the costs of fuel, adding to the cost of freight forwarding services
• The rising labor costs adding to the cost of warehousing and distribution services
• Increase in the cost of raw materials, etc
Market demand superimposition in a multi-channeled economy
Economies are multi-channeled. The customers buy products from different channels and thus, market demands are influenced by numerous directions. The channels posing a challenge for supply chain management are:
• Conventional retailers and wholesalers form up a large section of the total demand due to the predominance of offline shopping.
• E-commerce is the most rapidly growing business form. Thus, a massive demand is generated from online platforms.
• International markets also require a platform that can meet the overseas demand efficiently.
Complexities may turn opportunities into complications
As the firm tends to upgrade the scale, it automatically adds up more complexities. Many times, these complexities may turn a growth opportunity into a complication. For instance,
• Adding levels to the chain: Adding more levels to the supply chain doesn’t necessarily indicate better management. Additional levels command for higher costs, the opening of additional touch-points, synchronization with other levels, etc, and thus, can be contrasting to what the firm was expecting.
• Launching newer products: Launching newer products like dairy, chemicals, etc demands refrigerated storages, which adds to the cost.
• International expansion: Again, expanding to international markets may add up to the grievances through time zone differences, poor demand fulfillment, improper synchronization, etc.
• Policy changes: Changes in the policy of the firm may end up ruining public relations.
Meeting demands with quality maintenance
Meeting demand without compromising with the quality is a key area of focus for the supply chain management. The consumer is the king and thus, wants the best quality products and services. Some of the challenges faced by the supply chain managers are:
• Quick and efficient delivery of products
• Checking the quality standards of each product
• Prioritization of safety of consumers
• Efficient coordination of freight forwarding companies in case of a cross-dock warehouse
To wrap up
There’s no field deprived of challenges and problems. For a firm to outshine the competitors, these challenges need to be dealt with efficiently and turned into opportunities and rule the market.
CDS Group of Companies (Author Bio)
The CDS Group of Companies offers a full suite of services under one roof, including Warehouse Logistics and Storage, Transportation, Transload, Customs Clearance and Supply Chain services. For more visit our website https://www.cdsltd.ca/