• 26-12-2021

5 common Mistakes in Supply Chain Strategy

Revealing an effective supply chain management strategy will help cut costs and improve profit margins. In addition, developing the supply chain and related business processes helps your company plan for the future, adapt to changes, and improve customer service.

Generating a Supply Chain Strategy is not difficult. But strive to avoid these blunders. Here are some general mistakes that should be avoided in supply strategy.

Let dive into the topics

1. Ignoring analyses of the distribution system

This mistake can generate many issues for a company besides commercial issues. These problems often happen when there are changes in the business environment. One of the most common mistakes is to overlook this. You might be missing opportunities to:

  • Protect working costs
  • Increase energy performance
  • Maximize use of assets
  • Decrease shipping costs
  • Form a flexible supply chain
  • Enhance client satisfaction
  • These have been some of the most significant mistakes you can make in the supply chain. However, if you fix them or avoid them, you can expect significant growth.

2. Short-Sighted Risk Management

Supply chain optimization presents many risks such as the following:

  • Delivery days
  • Increases in demand
  • Quality problems
  • Supplier issues
  • Supply shortages
  • These factors create risk management a dynamic process that often needs organizations to achieve one short-term solution after the other. This short-term risk management means that managers have difficulty proactively evaluating problems in the supply chain. Compensations such as cost savings, time to market and inventory turnaround also give towards short-term goals. Managers must join their efforts to mitigate risk with metrics that will result in the long-term support of higher management. Risk management is the simplest activity in the supply chain method to de-prioritize since it contrasts with goals and rewards.

3. Feeble responsibility structure

Typically organisations don’t allow the responsibility for supply chain disruptions to anyone at the operational level within the procurement organization. The lack of responsibility, in this case, confuses when the action needed to restore the SCM falls outside the scope of normal activities.

4. Reduction of Optimized Marketing Processes

Not optimizing marketing processes associated to supply chain management is another common mistake. Usually, problems like this develop progressively as the company grows and/or shifts focus. As that happens, supply chain methods that used to work pretty well can become weak and less effective.

Getting all your teams working together is the first step to optimizing supply chain management. Operating in storehouses is much less efficient than operating as a network. Make sure everyone involved in maintaining the supply chain can easily collaborate and is clear on their common goals.

Part of optimizing your marketing processes involves improving supply chain clearness. End-to-end supply chain clarity makes it easier to collect valid data, maximizes performance, and is a key part of risk management efforts. It’ll also help with enhancing security controls.

5. Inadequate Client Assistance

If you’re not creating productive relationships on both ends of your supply chain, then the whole process isn’t profiting your company as much as it could. Both merchants and customers are key to your company’s progress. The better your connections with them, the better your supply chain management will be. Price is essential when choosing a supplier. But when you’re shopping around for the best price, you should also keep in mind what kind of company you’ll be working with. Someone willing to act as a partner with your company is much more useful in the long run than saving a few dollars. You might find that some clients need more support while others are being over-serviced. Again, getting the right balance is key to improving supply chain management.