Reliant Logistics Institute


Key challenges in managing the supply chain


In the context of wider global trends – affect corporations of all sizes and pose threats to existing supply chain organizations. In addition, moving with the trends and incorporating their benefits requires a restructuring of operations whilst being able to maintain a competitive position in the market. Improving supply chain visibility is perceived to be the most important challenge across all industries. The interview partners stressed the following aspects of improving supply chain visibility: Identification of where and how many products are stocked, how products are being sold in different markets, how to allocate stocks to improve the service levels and reduce logistics costs, and how to reduce waste along the supply chain. Improving supply chain visibility is considered a pre-requisite to convert the supply chain into a global, integrated network. Among other topics, demand volatility, complexity management, and globalization also received equally large attention across industries, with demand volatility presenting a key challenge. Nowadays, the growing economies in developing countries like China and Brazil have empowered customers to ask for better products and services, thereby increasing pressure on manufacturers to cope with the inherent volatility of short-term customer demands. Therefore, manufacturers are constantly seeking ways to gain relevant insights into volatile markets and at the same time improve production and supply capabilities to deal with the unanticipated customer needs in a more adapted and flexible manner. Supply chains have been becoming more and more complex today. The key challenge of coping with the complexity across most industry sectors is to use innovative solutions that allow manufacturers to simplify their supply chains without limiting their capabilities to run complex processes. Here, companies are focusing on the development of global/regional process templates and the simplification of their IT landscape, based on moving away from point-based solutions towards integrated platforms and deploying innovative technologies, such as Cloud. During the last two decades, globalization has been a big discussion, affecting economies on both macro and micro levels. Here, companies deal with two key topics among others: Firstly, effective use of local sourcing as well as decentralization of production to improve flexibility, reduce lead times, and improve responsiveness, and, secondly, balancing global material flows instead of transporting only finished products taking into account worldwide product launches and regional tax issues. Among the third-tier important challenges that are shared across industries, the emergence of new business models and the need to innovate is one of the most frequently stated ones.


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