5 Major Issues Facing Supply Chain Leaders

February 19, 2015 Updated: April 23, 2016

The supply chain is a complex network of companies and individuals that ensure that a product leaves the manufacturer and ends up in the hands of the consumer. As you may imagine, this all looks great on paper but acts of man, the weather and other disturbances can lead to supply chain problems.

  1. Never trust the weather

Always expect the unexpected should be the motto for any supply chain leader. If your distributor has the stock, and you have consumers who want to buy the goods, then all should be rosy. Unfortunately a sudden blizzard or hurricane can introduce problems into the most smoothly run of operations. This is the time for those in communications teams to contact customers and keep them updated on the situation. Castors from Tente can help in this type of operation as you can simply glide across the office from one phone or PC to another and keep your customers updated on any situation.

  1. Logistics and the supply chain

Logistics is a key component of the supply chain story. In 2014, the logistics guru, Hilary Devey, suggested on The Retail Bulletin website that with the declining fortunes of the UK High Street, the logistics industry has to become more efficient and cost driven than ever before. With ‘more pressure to source a fast and cost effective delivery service to replenish shelves without downtime,’ all elements of the supply chain are under increased duress to perform efficiently.

  1. Increase public confidence in the supply chain

Following problems with horse meat scandals, toxic wine and other goods, the public is losing confidence in the ability for major household brands to deliver goods that are exactly what they proclaim they are on their labels. At some stage the supply change has been infiltrated, and the public must be reassured that these circumstances can never happen again.

  1. Bad press

Earlier this year the This is Money website published a series of articles calling supply chains ‘bullies’ and other defamatory phrases. Apparently, consumer giant Heinz takes too long to settle its bills, which in turn puts small family businesses in financial peril. If the supply chain wants to work efficiently it has to recognise that not all businesses have as large purses as some of the market leaders. The producers are in fact giving the supply chains a bad name, and Mike Cherry of the UK’s Federation of Small Businesses has said, ‘blue chip operators are abusing suppliers by insisting on ultra long settlement terms.’

  1. The oil crisis will always affect the supply chain

The price of oil is another major factor that can influence the supply chain performance. Currently oil is at a very low price, but in a few months’ time this situation may have changed. An efficient supply chain has to be able to act as a prophet, and that isn’t always easy. In a perfect world, the manufacturer will be able will be able to pass on any price reductions to its consumers, as a result of lower transportation costs. The problem is that we don’t live in a perfect world.