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15 Oct 2021


The Challenges in Global Supply Chain Management

DemandCaster
DemandCaster


To say that 2020 brought record global supply chain challenges would be a gross understatement. With COVID-19, trade wars, weather events, port congestion, and other significant upheavals, many companies saw more disruption in a year than they had seen in decades combined.

These disruptions brought with them supply chain management problems and challenges that didn’t exist before while magnifying others and exposing their weaknesses. Demand and supply planning teams found themselves working to overcome obstacles. Some industries saw the bottom fall out of their order positions, while others that supplied essential items experienced unprecedented growth.

 

Supply Chain Challenges

While many of these challenges were related to disruption alone, others were already on the horizon, highlighting the need to reassess and develop new strategies. Here is a look at some of the most significant supply chain challenges facing global supply chain management:

1. Disruption

Disruption is always a concern and a “buzzword” in demand and supply planning. But major disruptions before 2020 had been rare and were usually singular in occurrence. The challenge today is to craft strategies to address the issues of supply chain management that come with a new expectation of frequent, significant, and combined disruptions.

2. Cost

As the world recovered from many disruptions, supply chain managers faced higher transportation and logistics costs. This included fuel, additional labor to clear port congestion, added cost to replace materials with sensitive expiration dates, expediting, and more.

3. Lack of Transparency

One of the most significant weaknesses of the global supply chain was its lack of transparency. While many companies had begun to undertake digitization, most were still impacted by a lack of transparency. It is one thing to lose track of an order or shipment in transit, and such events can usually be solved by a phone call or email. But it is another problem altogether to lose an entire ship or a vast swath of raw materials that cannot be fixed with a quick workaround and a phone call.

4. Material Shortages

Material shortages are new compared to pre-2020. Raw materials, paper products, commodities, and silicon for computer chips have surfaced as recent problems. This has even resulted in the strange reality within the automotive industry of vehicles being produced and sitting idle while awaiting chips before heading to the dealerships, impacting demand planning, supply planning, production, and increased labor and handling to install the chips. Popular product lines have had to be scaled back for other industries with fewer offerings from established brands and empty shelves.

5. Increased Supply Chain Complexity

All of these things work in concert to render the supply chain more complex. Of all supply chain management problems out there, increased complexity is the one that can overburden a demand and supply planning system, especially if that system is siloed, fragmented, and has many manual legacy elements from a past era.

6. New Processing Technologies

Not all global supply chain challenges are related to the last year’s disruption. Technologies, especially those connected to the Industrial Internet of Things (IIoT), are revolutionizing manufacturing operations across the globe. As they do, devices, equipment, and OEM machinery are becoming more and more connected. These new processing technologies such as advanced automation and robotics can strain manually driven demand and supply systems and lead to additional supply chain management problems. With all the world becoming connected, new processing technologies need an advanced and unsiloed supply chain management system to connect to.

 

Automating the Supply Chain

An agile demand and supply planning software solution like Plex DemandCaster allows you to address the challenges above with confidence. By unsiloing data and automating processes, your supply chain can gain the visibility to address disruption by detecting shifts in demand in near real-time.

And increased costs in transportation and logistics need not automatically translate into price increases for your customers. With solutions such as robust inventory forecasting and optimization software and rough-cut capacity planning, Plex DemandCaster can empower teams to optimize your supply chain to mitigate increased costs through better, more precise planning.

Plex DemandCaster’s software can be integrated with many other systems to deliver accurate demand and supply forecasts that navigate the complexity of the supply chain and deliver powerful analytical insights into the hands of decision-makers when they need it.

While supply chain management problems have increased in recent years, a solution is available to help meet the challenges head-on. Contact us today to find out how Plex DemandCaster can help your company chart a course and remain competitive.

 

 

 

 








 

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Last update 11 Aug 2022
Downturn in UK manufacturing as production and new orders contract
   Source: S&P Global /CIPS UK Manufacturing PMI   -  IHS Markit
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