Supply Chain Challenges Faced by Manufacturing Companies

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Created on February 18, 2021

Manufacturers across globe have faced multiple challenges in Supply Chain from time and again that changed (increased / decreased) with 

  • Variation in user demand, 
  • SKU Proliferation
  • Export-Import Cross-border laws
  • Environmental Compliances
  • Competition (local/global)
  • Globalization

Supply chain is a multi-stage process with different stakeholders & series of operations. Hence, use of technology to organize, automate & make the system more efficient is a need to grow & compete in today’s world. Predictive planning based on data analysis & with the right combination of technology can provide companies with visibility & control.  

It is only logical to say that for any manufacturing company it is very important to have a well planned and optimized supply chain plan, here are a few major challenges that they consider when making supply chain planning.

Meeting Customer Service Standards

Larger than life manufacturing brands that have high standards of product & service quality to meet. This urges them to make supply chain plans ensuring that there is continuous supply of new products & spare parts as well. Now this may sound simple but takes a lot of planning because any delay or overburdened inventory can impact the company by millions of dollars in just a quarter.

Impact on costing

Supply chain i.e freight air or ship , domestic distribution all are an integral part of any products cost. Let’s say Apple has manufactured a new Iphone range now the devices are manufactured in US, hence they have to be shipped or sent by air cargo to other places of the world which means that the cost of this product will be different in different parts of the world & also the availability of the product get affected.

Size, Volume & Weight

While planning Supply Chain Operations any manufacturer faces a challenge about the physical space occupancy & weight of the product before even thinking about a ship or air freight forwarder. 

  • Ford if wishes to ship cars from one part of the world to another they would end sending only 100s of units in a whole ship, which would not only make the product shoot up but also will never be able to meet the user demand in time hence they need a different approach.
  • Apple on the other hand if plans to ship, let’s say Iphone 6 now the device weight around 385 grams & measure 15.5 cm x 9 cm x 6 cm in dimension, imagine how many phones can you fit in a 1 container plus the total number of container that can be occupied on a ship or how many can you fit in an air cargo plane. They can fit more than 100K phone in an airplane & an even higher number on a ship.

SCM Risk Planning

Supply Chain Planning also demands focus on risk management because factors like global demand surge, cross-border politics, port congestion, climate change & restrictions, and more of similar challenges. They may or may not be foreseen while planning a supply chain cycle however any company cannot ignore them as these are not just unavoidable but also severe to delay or even damage a cargo at times.Image a cargo which spare parts for a locomotive wagon leaves from US and is heading towards India via sea, the ships is delayed due to bad weather or the ship is stopped in international water due to some trade rule / policy. On the other hand if the wagon needs a repair or an overhaul it get delayed as well 

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