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What are today's most critical supply chain management issues?

Savvy supply chain managers need to take stock of the issues affecting today's supply chains so they can be proactive about strategy. Here's what they should know.

Generally, the supply chain management issues that supply chain managers are most concerned with involve improving...

operations -- speed, responsiveness and efficiency (cost reduction) -- as that is the essence of their job.

In 2017, leading supply chains are rapidly deploying emerging technologies to support those objectives, primarily the industrial internet of things (IIoT) and big data analytics. Dealing with supply chain risk is also a top concern.

IIoT sensors and smart, connected, location-aware devices are providing an unprecedented level of visibility throughout the supply chain in remote warehouses and production facilities, with goods in-transit, and at customer locations. Suppliers are beginning to use this visibility, in conjunction with advanced analytics, automation and supply chain event management software, to more tightly manage inventories, transportation and warehousing to deliver a better, more responsive service at a lower cost.

A more efficient supply chain is almost, by definition, more fragile. An inefficient supply chain is characterized by extra inventory, which can be deployed to cover up errors and unexpected disruptions. As supply chains become more efficient -- that is, they have less extra inventory sitting around -- any disruption in the flow of goods can have an immediate effect on customer service and the availability of goods downstream. Several recent, well-publicized events, such as the tsunami in Japan; flooding in Thailand; and factory explosions, collapses and fires in various locations, have demonstrated that vulnerability.

When it comes to important supply chain management issues, savvy supply chain managers are paying increased attention to risk avoidance and mitigation. Cross-functional teams brainstorm the possible risks to areas such as supply, transportation, data, security and personnel, and they develop plans to reduce or eliminate the risks where possible. For the remaining risks, plans are developed to lessen the impact and prepare for rapid recovery, should a problem occur. This is an ongoing process, as supply chains change constantly and new risks can be identified at any time.

Fortunately, the new technologies that support more efficient supply chains can also provide early warning of emerging issues, as their detection has been enhanced by analytical and management software. So the impact of problems can be minimized and recovery action taken at the earliest possible time.

Other supply chain management issues on the supply chain manager's agenda include new sourcing decisions related to changing international trade considerations (changing exchange rates, tariffs and politics) and volatile commodity prices.

Next Steps

How supply chain analytics can boost success

Get ahead of supply chain risk

What you need to know about IoT and the supply chain

This was last published in March 2017

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