Supply chain management describes the lifecycle of a product—from design, planning, execution, monitoring, and control, according to Techopedia. It touches every part of a business from manufacturing to logistics, accounting to sales. And while it might be easy to think technology has made supply chain management easier since the term was coined in the 1980s, that’s not necessarily the case. Let’s take a look at the three most common challenges of supply chain management that companies deal with today.
The term globalization describes the “interdependence of the world’s economies, cultures, and populations brought about by cross-border trade in goods and services, technology, and flows of investment, people, and information.” (PIIE)
Globalization gives businesses the opportunity to source new products, services, and workers across different continents. While this can lead to decreased costs and lead times, partnering with companies across the globe increases supply chain management challenges relating to logistics, time zones, languages, and currencies, to name a few. Before making international business part of your strategy, it’s important to not only be aware of these hurdles but to have technology that allows you to manage them with ease.
Going hand-in-hand with globalization, outsourcing describes when a company uses a foreign supplier to acquire goods and/or services. The top reasons a company typically outsources business functions are to reduce costs/overhead, gain access to IT resources, and free up internal resources to focus on what they do best.
While outsourcing can be beneficial to your bottom line, bringing in additional partners increases the challenges of supply chain management. By adding layers to your supply chain, you are at the mercy of third parties when it comes to things like quality, lead times, fulfillment, etc. If you are not managing your partners appropriately, customer satisfaction and sales could suffer. When outsourcing business functions, it’s important for the IT systems to be integrated and that you have full visibility over the supply chain, beginning to end.
Meeting Customer Demands
Step out of your role as a supply chain professional for a minute and think of what you expect as a customer. For most, that means getting a high-quality product at a low or reasonable cost, delivered as quickly as possible, with the ability to track it through the entire process. Now step back into your SCM role. No pressure, right?
While companies like Amazon make it look easy, you know it’s far more complicated to keep up with demands and meet expectations whether for B2B or B2C customers. The companies who don’t, well, they might not be around much longer. To stay nimble and deliver on your promises, it’s imperative for companies to have real-time, 365x24x7 control of all aspects of their supply chain. Having the ability to make proactive decisions and see the impact of “what-if” scenarios are critical in not just meeting, but exceeding customer expectations.
Now that we’re more aware of the challenges of supply chain management, how do you overcome them? The answer lies in technology. Using a business management system like NetSuite is the first step product companies can take to automate their supply chains, remain nimble, increase transaction speed, reduce costs, and provide seamless collaboration with internal and external partners.
How? Enter NetSuite’s Supply Chain Control Tower. The Control Tower gives you a complete 360-degree view of your supply chain in one place—macro views for a real-time snapshot or drill-down capabilities to take action on an individual transaction. Intelligent predictions and simulations on transfer order risks and recommended actions help automate your supply chain processes even further. And because it’s part of the NetSuite solution suite, your data flows seamlessly from one area to another. No manual rekeying or duplicative work! What’s more, NetSuite offers a true global ERP solution, allowing companies to effortlessly manage currencies, languages, taxes, compliance and more.
Ready to see how the challenges of supply chain management can be relieved with NetSuite?