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5 Supply Chain Pitfalls To Avoid

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Be careful with your supply chain.

Most companies dealing with supply chain management face certain pitfalls that affect their ability to live up to what they expect. Leaders in most of these companies are always reluctant in embracing change since they are always focused on their own set ways of achieving company goals. They focus on cost-cutting opportunities that come their way and forget about the long-term implications of the choices they make. Part of the reason why most of these companies fail to achieve their goals is the ignorance they have in establishing an efficient and effective supply chain management plan. Below are five supply-chain pitfalls that all leaders should avoid in order to achieve their goals.

1. Consolidating the systems too soon

In order to assess the legacy of supply chains, a company requires both common metrics and consistent data. Most companies mistakenly believe that they can possibly get consistent data by consolidating their supply chain systems. As a result, they decide to quickly undertake system consolidation which is relatively counterproductive, expensive and overwhelming. Instead of consolidating all systems into one, companies should alternatively think of building a common database that handles all the transactional data from the other small systems. Such modern database systems are designed with simple tools that can unify the disparate transaction systems. As a result, all the issues involved in a supply management chain such as production, reliability, demand variability, inventory allocation and order fulfillment will be handled effectively. Immediate consolidation of data will relatively serve management options but will not tackle the changing infrastructure in the whole system.

2. Using outdated technology

Most companies are still making use of spreadsheets to handle their analysis. Computations involved in a supply chain need to be handled by a special computer system that is specifically dedicated to handling that purpose alone. Using spreadsheets is pretty archaic since data can easily be manipulated with many errors which will definitely affect the overall output from the company. The computer system should be constantly updated whenever updates are available in order to continue serving the company at the same pace with emerging trends in technology. This should as well transform with other types of systems used in the company, whether manual or automatic.

3. Lack of strategies to deal with risks

Risks are apart of what a supply chain will occasionally face. Most companies develop their supply chain management platforms without considering the risks they are likely to face along the course of operation. Each company ought to have an effective risk management strategy that will protect the management from making sudden critical decisions that affect the overall performance of the company. Risk management strategies should majorly deal with protecting your data. There are companies that can help you out in developing the strategies. Contracting the right provider will have their own recovery plan for your company and you will be sure of the safety of data despite the challenges you might face.

4. Trusting past historical trends

It is true that historical information can provide a trustable basis for any supply chain management company. However, this could suddenly change in the course of time. Therefore, companies need to trust historical trends at some point but still handle regular reevaluation metrics in order to rate the volatility of the market and changing trends. Furthermore, companies ought to utilize solutions that automatically update and track information between suppliers and customers. Such systems will be helpful in rating the historical trends against the changing parameters that affect the success of a company.

5. Defining the end state with no steps to get there

After conducting an assessment about the company, recommendations are made to define what the chain should look like. Most companies make mistakes by immediately trying to replace their current systems at once without considering the risks involved. This is bound to happen when recommendations are made without stipulating the steps to be used in achieving them. To counter this problem all supply chain leaders need to appoint a joint team from the different departments involved in the company in order to come up with steps on how the recommendations need to be implemented. Handling the recommendations in series is the best way to avoid the pitfall of disruption that affects the overall performance of the company.

The only way to achieve the desired results from your supply chain management company is by avoiding the pitfalls that affect the quality of the results. Leaders of any company must be flexible for change and need to appreciate the role played by every member in the company. To be successful, you have to allocate enough time for every business activity in order to achieve perfection. These supply-chain pitfalls change overtime and every business leader ought to have the necessary skills required in dealing with upcoming challenges.

About the Author

Whichwarehouse provides advertising for logistics companies in the UK and a free service for clients looking for warehousing throughout the UK. www.whichwarehouse.com, 0800 783 7842

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Author:Globial International Business Team

The Globial International Business Team researches, analyzes, and reports on all things related to global trade and business.

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