How to Deal with the Most Common Problems as a Supply Chain Manager
The supply chain and logistics industry, like most industries, is dealing with the digital disruption caused by automation, mechanisation, digitisation, and analytics. These are more than just buzzwords. Companies that fail to adapt in the face of this onslaught are not expected to survive for long.
This is the environment in which supply chain managers find themselves. It’s a high-stress, high-reward environment where every little management decision may have long-term repercussions for the company.
Most Common Problems Faced by Supply Chain Managers
Customer satisfaction delivery
At the crux of each business are the customers. The right item must be delivered to the right person at the right time. It’s the reason supply chain companies now are moving from manual labour to automation: to increase accuracy and efficiency. Failing to pay attention to customer service will come at a high cost. For example, a 2018 report on “Serial Switchers” revealed that companies lose about $75 billion a year as customers switch brands due to poor service.
Solution: Although there are industry benchmarks for quality such as the ISO 9001, personalised service seems to hit the right spot for most customers. Each one has unique needs. The trick is how to make your company relate to its customers like a mom-and-pop operation even while you continue to automate the workflow for greater efficiency.
Shrinking global environment
“Outsourcing” and “offshoring” are two terms associated with globalisation to the detriment of small and medium businesses specifically. Companies now hire remote workers who are halfway around the world where labour is cheap. Also, the competition becomes stiffer as anybody can run a business on a much smaller scale due to technology and the Internet.
Solution: Instead of being intimidated, make technology work to your advantage. For small and medium businesses, don’t be pressured by outsourcing. Focus on your core strengths and make sure to deliver superior quality service to retain your customers. While bigger companies can afford to outsource a good chunk of their operations, it also complicates their supply chain workflow. They work with a culture and a government bureaucracy that is much different from their own.
The bigger your company grows, the bigger the expenses will be. You will have to deal with a larger payroll, logistical costs, permits, gas, utilities, among others. That doesn’t even factor in the periodic increases in salaries to match the minimum wage set by the government.
Solution: Automating your workflow will drive down cost because the technology can handle some of the administrative tasks. Investing in software products, such as a yard management system, will allow you to spot the gaps in your workflow and see where you are bleeding money. Data analytics will also help you become more efficient by choosing areas on which to focus on the most significant returns.
Rapidly changing market
You invest millions in R&D for your core product only to see consumer behavior change due to shifting demands in the market. As a result, products now have a shorter life cycle than ever. As a manager, you are under much stress to keep your ears on the ground for the latest trends to stay ahead of the competition.
Solution: Investing in analytics that can predict consumer behavior and spot trends will be invaluable for your business. You need to make sense of the big data, especially with the fast exchange of information nowadays, so you can craft marketing strategies and product innovations that will fill the market demands.
One nagging problem—not just with the supply chain industry but with other sectors as well—as the high turnover rate for employees. Millennials do not remain with a particular employer as long as previous generations. A Deloitte study revealed that many millennials anticipate leaving their current employment within two years.
Solution: No single solution will magically allow you to keep your valued and valuable employees from moving on. You can only make sure that:
- Your working environment is not toxic
- You give them a clear career path
- You listen to their opinions
- You offer them plenty of support
You might even experiment with flexible work hours or remote offices. Despite the costs, you will incur more expense if you have to hire new workers every two years.
As a manager, you need to be always on top of your carrying the cost of the stock. This factors in the price of storage, tariff, taxes, labour costs, insurance, replacement, and product depreciation. Accordingly, the inventory cost makes up as much as 50% of your capital investment. For a small business, you can’t afford a high inventory for long periods. It’s no way to sustain your operations.
Solution: One solution is to invest in inventory management software products that will help automate your workflow. You can track the movement of goods in your inventory and make sure each item is delivered to the right address. You can also schedule the replacement of damaged items, and they are also equipped with analytics.
Stress and Risks of Addiction
One final problem is not operational but personal: stress, According to the American Institute of Stress, 40% of workers believe that their job is extremely or highly stressful, and 25% point to their roles as the top stressor in their lives.
The numbers even go higher as you climb up the corporate ladder. Research published in 2018 showed that more than 51% of executives surveyed admitted that they are under an enormous amount of stress.
Being subjected to stressful triggers day in and day out can take a toll on the executive. Any doctor will tell you that stress is a killer and it’s been linked with health problems like stroke, cancer, depression, obesity, coronary disease, diabetes, and addiction.
Solution: You shouldn’t just ignore the symptoms of stress. For the executive and workers, you need a system in place to provide treatment for anxiety and stress before it can escalate to the point where squeezing a rubber ball, meditation, or a day at the spa can’t relieve it.
As early as 2008, a study established a link between chronic stress and vulnerability to abusing drugs or alcohol. The stressed workers tend to turn to the bottle or illicit drugs to cope, and then they (and you) have two problems.
The changing workplace, markets, and interconnected global economy present many challenges for supply chain managers. It is best to be prepared for all of them before they become problems.
Patrick Bailey is a professional writer mainly in the fields of mental health, addiction, and living in recovery. He attempts to stay on top of the latest news in the addiction and the mental health world and enjoy writing about these topics to break the stigma associated with them. With a strong background in journalism and an English degree from Central Michigan Univesity, Patrick has expanded his expertise in recent times to include supply chain topics such as todays article.