Plan for 11 key Supply Chain Issues like a Pro


There are multiple supply chain issues likely to cause delays and frustration during the process. In this article, I have focused on the specific issues that arrive during the inbound, in-house and outbound stages of supply chain operations.

supply chain issues

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Stages of Supply Chain Issues:

Inbound Supply Chain Issues

In-house Supply Chain Issues

Outbound Supply Chain Issues

1. Strategic Sourcing

2. Supply Procurement

3. Supplier Development

4. Master Scheduling

5. Capacity Planning

6. Material Handling

7. Material Planning(MRP)

8. Warehousing

9.Distribution

10. Outlet Management

11. 3PL Provider

Inbound Supply Chain Issues

1.Strategic sourcing

The main issue is where to subcontract the work or which suppliers to utilize for procuring the raw material? It is very important to have a sourcing strategy, wherein a company can shortlist all the suppliers ready to meet the specific budget and high-quality standards.

For Example, if a US based company is outsourcing raw materials from China, it has to research and ensure that a supplier not only meets the deadlines and the budget but also the high-quality standard required in the US. It can be challenging to come across reputed suppliers in altogether a different location. Reviews and ratings are helpful in multiple cases.

2.Supply Procurement

After deciding the sourcing channels and the suppliers, the company has to manage all the processes in procuring raw material. There are multiple factors that could fail during procurement. To illustrate, it is possible to lose the goods or damage them during shipment. In that case, will the supplier hold responsibility and reimburse for the loss? What does a company go through to ensure that the goods are delivered on time without any damage?

For example, Qualcomm Inc outsources chips from a TSMC, a company based in Taiwan. In the case of discrepancies, Qualcomm has a predefined agreement that mentions the actions on behalf of Qualcomm as well as TSMC. Thus, systematic communication is the key to a successful supply management or procurement.

3.Supplier development

Multiple companies have issues in understanding, How to coordinate with the tiers of suppliers for their process improvement and manufacturing potential? An organization’s success depends on’s on the quality of the raw materials or services it procures. Thus, it’s important for the organization to constantly upgrade its standards and have an operational strategy. Similarly, the company also has to ensure that the supplier constantly improves processes for a better quality of supply every time. How does a company ensure that the supplier is also making upgrades in the process of manufacturing and delivering the raw material?
It’s always essential to constantly communicate with the supplier and discuss the requirements in advance. If there is no clarity between the supplier and the manufacturer, how will the manufacturing process improve with time?

In-house Supply Chain Issues 

4.Master Scheduling

During which phase of the project timeline, can a unit manufacture a specific part of a product? For example, a factory fabricates a product during the production phase.  It is essential to have a schedule, that decides the implementation of a task during a specific phase of the product.

A construction company predefines the tasks and the stages in a sequence. It will accumulate the manpower during the staffing stage, after that, it will allocate resources to the manpower. After all the stages are over, and the building is complete, It will schedule painting walls.

The main issue here is, what if the task completion deviates from the set schedule? In such cases, I recommend having some slacks(“precautionary time for any deviations or mistakes.”).

5.Capacity Planning

What is the maximum limit for the tasks within an assigned time frame? A company has to ensure an optimum utilization of resources by not wasting any time. Thus, it has to plan the right number of tasks in a specific time frame. It cannot overburden the employees with multiple tasks in a short time frame. At the same time, it has to refrain from assigning a fewer number of tasks in a specific time frame and creating a panic later on.  

6.Material handling

Where to store, protect, manage and transfer the material while it’s in-house for processing, warehousing, and distribution? The factory has to be in a clean hazard-free condition so that the goods and the raw materials are protected during the production. It also has to store them in a systematic way to avoid confusions and difficulties.

7.Material Requirement Planning

What system can be ideal for optimizing inventory management, production planning, and master scheduling? In brief, how to plan the layout of the production during a specific time frame?

Numerous companies utilize an MRP software that takes care of planning the inventory management and scheduling aspects. However, it is not recommended to solely rely on the MRP. There are multiple factors such as seasonal fluctuations, unexpected breakdowns, etc. that an MRP won’t consider.

Outbound Supply Chain Issues 

8.Warehousing

What kind of warehouse can be ideal for storing all the products and semi-finished goods? How can a manufacturer manage the goods so that there is no damage? What is the appropriate number of goods to store in the warehouses? How far can the warehouse be from the factory and the external customers?
For example, CDW has a warehouse in Nevada for all the products required to ship on the West coast. At the same time, CDW utilizes the Chicago warehouse to ship the products to its East coast customers.

9.Distribution

Is there a need for intermediaries such as the distributors? If yes, what is the appropriate number of distributors? What kind of distribution structure would lead to a faster product delivery? How to supply the goods to the distributor? To illustrate, Dell provides custom solutions and has no mediators in the supply chain. It directly ships the custom order to the end customer, saving costs and time. Thus, Dell decides not to have distributors in the network.

10.Outlet Management

What kind of marketing techniques would reach the widest customer base? What retail outlets would be beneficial and how to collaborate with them for the latest demands and supply at different intervals? For example, HP prioritizes Best Buy over a local electronics store as it has number of physical locations, reaching a wide range of customers

11.3rd Party Logistics

Which 3rd party logistics provider would be ideal for moving our products where required? How can a manufacturer ensure responsiveness and collaboration with the outsourced logistics services? For example, FedEx is expensive than USPS, but when it comes to expensive and easily breakable goods, one has to pay some extra price and ensure he selects a provider that has a better protection plan.

Wrap-up

In conclusion, there are multiple issues during the supply chain operations, that can only be solved with the help of planning, communication, and technology at different levels.

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Gopika Jhala, has several years of industry experience in IT Consulting and Project Management. Her research begins at the intersection of technology and operations to analyze the global trends and strategies. She has published widely on a range of topics, from cloud computing, and supply chain management to virtualization.

About

Gopika Jhala, has several years of industry experience in IT Consulting and Project Management. Her research begins at the intersection of technology and operations to analyze the global trends and strategies. She has published widely on a range of topics, from cloud computing, and supply chain management to virtualization.

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