Common Mistakes Companies Make in Supply Chain Management

Your supply chain is one of the most important components to the success of your company. It’s also very vulnerable on many levels. Whether you are working to improve efficiency or striving to offer a better quality product, you need your supply chain to deliver. Properly managing supply chain management means not only achieving your goals of getting products where they need to be, but also doing it efficiently, with transparency, and with the customer satisfaction necessary to keep the business growing. Sometimes, mistakes get in the way.

Below are the most common mistakes businesses make regarding supply chain management. How many is your company struggling with right now? David Kiger offers a few helpful solutions to these problems as well.

Not Including Everyone in Decisions

One of the key components of supply chain management is making improvements that encourage efficiency. Sometimes, companies start at the top. Executives and business leaders make key decisions that they believe will improve what’s happening on the ground. After all, they know the business well. The problem is, they haven’t considered the people working the business. While management has the experience to manage the overall company, to get to the heart of improvements, it’s important to focus on the person in the trenches, making the decisions, and creating that efficiency (or lack of it).

office workers reviewing document
Image courtesy Pixabay

To solve this problem, include your team in the big decisions about improvements for efficiency or in any significant changes. A key component of this is the Kaizen process. It allows everyone in the company to offer information and contributions that could create improvement. Value everyone’s opinion and listen to everyone’s suggestions. By doing so, you’ll make small, inexpensive changes that make a big difference in your supply chain.

Middle Leadership Lacks Engagement

It’s quite common within supply chains for middle-level management to become the workhorses of the operation. In some cases, though, they become the least appreciated component of the job. To improve supply chain management here, it’s important to look at why these individuals are not engaged and to address the underlying cause.

  • Are you giving them the global visibility they need to run the company?
  • Does the data they have on hand provide enough up to date information to allow for the best possible decisions?
  • Are your leaders truly forward thinking team members?

Do they have the skills necessary to do the best job possible?

A key component of this, in many situations, is a lack of technology. If you are still relying on systems for five or six years ago, your middle management is struggling to keep up with companies that are using much more up to date information. It may be time to engage your team to find out what they need to improve.

Are You Overcomplicating Matters?

Another common mistake involves the focus on too much at one time. Again, your upper and middle management are nearly always at the heart of this area of concern. How complex is the operation? Now, ask, how complex should it be? Keep it simple is more than just a slogan. It should be the process you use to improve significantly the way your company operates in its supply chain.

Instead of focusing on dozens of matrix components, narrow your focus to just 10 to 15. This way, you are able to narrow down the problem, find the solution desired, and then make improvements. A narrow, simple focus like this can help encourage success within the organization because it limits the number of components your team has to worry about, plan for, invest in, measure, and analyze.

A Lack of Transparency

One of the biggest trends we are seeing in the supply chain sector is the need for transparency. It is one of the most common areas of concern for one reason. Your customers want to know where your product and raw materials are coming from and how they are taken care of from that point until they are delivered. One of the key areas of focus for pros like David Kiger is on finding ways to improve this area.

The key to improvement in transparency is to employ new supply chain management tools that allow for tracking and documentation. This means making changes and investing in training to make it happen. It is a growing need that is likely to impact your business going forward.

Other key problems, according to David Kiger, include not planning for disruption, becoming too lean, and not controlling increasing cyber risks. The key to ever improving your supply chain is to work consistently towards improved productivity and efficiency, but it is also to notice when mistakes are being made and to adjust to meet those changes. Managing risks and mistakes can help you to develop a solid supply chain going forward.

Advertisements