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What’s Keeping Supply Chain Managers Awake at Night?

Supply chains are like the central nervous system in humans – they are complex, integral systems that are constantly interacting with their environment. While the human body is programed to automatically respond (and fight infection, for example), supply chain overrides are largely dependent on the experience and skill of supply chain leaders and managers. Because supply chain problems can have cataclysmic ramifications for a business, supply chain managers have a lot on their minds. Learning about what keeps supply chain managers up at night provides leaders with a unique opportunity to proactively tackle issues that could derail their supply chain in the future.

 

To shed light on reoccurring and similar problems that all supply chain organizations face, APICS partnered with Michigan State University to survey supply chain executives in an ongoing study titled Supply Chain Management: Beyond the Horizon . As part of this study, the research team dove into common supply chain challenges to recognize root causes and also suggest proactive measures to reduce stress within a supply chain system. The whitepaper, “What's Keeping Supply Chain Managers Awake at Night?” identifies and explains six key areas of supply chain concern uncovered by the study. 

Capacity/resource availability

Most supply chain executives are concerned with the broad range of activities necessary to maximize a company's facility capacity, such as replacing old equipment with state-of-the-art, higher-capacity machinery. Replacing old processes and equipment with innovative solutions can put additional strain on the supply chain as there's rarely an ideal time to make a change. Data system capacity also creates limitations, with multiple concerns reported around accuracy and integration. To address capacity concerns, continuity planning provides a practical method to help organizations identify threats, determine potential impacts, mitigate consequences and manage disruptions.

Talent

The competition for proven and high-potential supply chain professionals is fierce. The supply chain industry is receiving new levels of attention and boasts one of the most rewarding career paths for determined young professionals. Organizations are concerned about attracting new employees and effectively developing their workforce. An easy solution for retention? Mentors over managers. Whether through an official mentoring program or informal support, encouraging professional development will keep people engaged and learning. Mentorship programs also create a platform for collaboration and understanding between employees at different levels and career stages. Investing in ongoing education, training and certification programs also improves skills, expertise, and engagement and can lead to improved supply chain performance. 

Complexity

Complexity breeds cost—and is an unfortunate offshoot of meeting customer demand. In addition to updating existing offerings and developing new products, supply chains are now stretching to accommodate increased ecommerce and delivery options. To mitigate risk associated with complexity, organizations can start by standardizing or simplifying internal processes throughout the enterprise. Organizational silos can be barriers to process simplification. Supply chain executives must regularly collaborate with their colleagues to break down these walls, overcome organizational apathy and infuse fresh thinking to incite process improvement.

Threats

From natural disasters that contaminate resources, to product recalls that damage corporate reputations, supply chains are confronted with challenges beyond their control every day. Cataloging weaknesses in the supply chain or areas of the business that are vulnerable to threats will make it easier for the organization to respond when the unexpected occurs. Strategically invest in risk management to improve resiliency, always be honest and open with employees during challenging times and keep stakeholders informed, early and often. 

Compliance

As regulatory pressures increase, supply chain executives are spending more time on compliance and compliance-related requirements. Traditional compliance areas surrounding trade, customs, and product regulation are dynamic and the increased global nature of supply chains compounds the regulatory environment. There is also the increased visibility and sourcing demands that are now driving consumer purchasing habits. The uptick in demand for conflict-free, sustainable, non-GMO, etc. is creating a very different supply chain management situation. Companies are expected to monitor and enforce compliance across divisions and around the world. Compliance can frequently demand its own team, with a Chief Compliance Office (COO) responsible for understanding the different policies and regulations as they apply across an organization.

Cost/purchasing

Price pressures put a strain on organizations across all industries and sectors, and the supply chain must be efficient to operate successfully under cost restraints. To overcome cost and purchasing pressures, some executives participating in the MSU study cited a need to be “ruthlessly efficient in order to survive.” For supply chain executives, adjustments are necessary to reconfigure supplier networks to improve cost structure. However, the supply chain performance cannot be entirely cost-driven; service and quality are important when considering performance. Organizations working under price pressures must be careful not to sacrifice product quality, delivery times, or other aspects that contribute to the overall customer experience. It's a delicate and daily balancing act.

The supply chain is one of today's most compelling and exciting areas of business because it is advancing so rapidly. Continuing to monitor new developments and identify common challenges enables supply chain leaders to anticipate rather than react to potential disruptions. And hopefully sleep easier– secure in the knowledge that they are as prepared as possible for whatever comes their way.

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