Overcoming common supply chain challenges
While supply chain standards have evolved to better meet market demand, there are still processes most businesses can improve upon. And those changes can be critical for staying competitive and profitable. Whether it’s a complete redesign of how products are transported or a simple update to the standard operating procedures you have in place with your provider, making the proper adjustments can fix the challenges that might be weighing on your mind. Explore 6 common supply chain problems that may be affecting your business and learn how to solve them so you can rest easy.
6 issues supply chain managers face today
The COVID-19 pandemic has brought its own set of challenges, and many companies are struggling to navigate new regulations, increased demand and rising costs — all of which contribute to the issues discussed below. However, many of the most common supply chain problems can be overcome even if they’re being complicated by the current environment. This list explores those challenges and provides tips for managing them in today’s market.
Capacity issues
Nearly every industry is feeling the effects of capacity constraints caused by the unpredictable economic environment. And while tight capacity isn’t a new concern, the rapidly approaching holiday shopping season will likely further complicate the issue. Shippers worried about securing capacity in the second half of the year should book as early as possible and work closely with their logistics partner to create a plan that will be successful in the current freight environment.
Clear communication of your needs and KPIs and a willingness to do things differently will be incredibly important, as tactics like mode shifting and freight consolidation may be recommended. Learn more about preparing for the peak shipping season with ArcBest.
Limited visibility
Proper visibility into your supply chain makes it possible to accurately forecast inventory needs, fix common disruptions that are impacting your bottom line, and recognize when shipments aren’t being handled correctly. The first step is to work with your logistics provider to set clear goals and get all information in the right place and format. Your partner may be able to provide technology solutions and perform a supply chain analysis to identify your biggest areas for improvement.
By understanding what’s happening in your supply chain, you’ll be better prepared to handle new situations and understand the impact of business decisions you might be making at this time. While some decisions may seem like great cost-saving changes, you won’t truly know how they’ve affected your business without proper data.
Dissatisfied customers
Not all customers expect the same things. Having a slow time-to-market can be detrimental in some industries, but many businesses find their customers care less about speed and more about cost or precision. If your supply chain isn’t set up to deliver on the specific needs of your customer base, you could be creating friction that makes it less likely for them to continue doing business with you.
Set yourself up for success by listening to customer feedback, testing new shipping options to see what resonates, and communicating with your customers when things aren’t going according to plan. Knowing what they expect from your business and delivering on your promises is essential to giving them the best service possible. For example, if you know products are behind because of capacity constraints or manufacturing delays, it’s likely best to communicate those timelines with your customers so they know what to expect.
Struggling with delivering on time? Here are our top tips for improving shipping speed.
Compliance problems
As consumer expectations continue to grow, retailers are consistently raising their requirements for vendors supplying products to their stores. As these demands get stricter, supply chain inefficiencies get more detrimental to your reputation and bottom line. Common issues include missed delivery times (too early and too late), inaccurate orders and improper documentation. All of which can result in fines, poor performance on retail scorecards and, ultimately, having your products rejected by the retailer.
In today’s retail environment, it’s critical to work with a logistics provider that understands the metrics you’re being measured against and has processes in place to help you deliver successfully. Learn more about retail compliance guidelines and how ArcBest can help you navigate the requirements.
Poor (or no) reverse logistics processes
Reverse logistics is the process of moving products backward in the supply chain — typically for returns, repairs or recalls. An efficient reverse logistics process ensures you’re getting value out of your products at all stages of their lifespan and makes it possible for you to recycle material and potentially regain some of your investment. However, it’s critical that you spend just as much time designing this part of your supply chain as you do the rest of your logistics processes. Failure to optimize these operations could result in excess costs, more waste and dissatisfied customers.
Work with your provider to ensure a safe, cost-effective method for handling returns and repairs. They can help you implement the best methods to keep you profitable.
Lack of scalability
The ultimate goal of supply chain optimization is to create a model that works no matter the demand. This means planning for day-to-day freight needs and unexpected situations, so you don’t waste time coming up with a solution to a new problem. One example would be establishing pricing with ground expedite or air freight carriers to help you respond quickly to emergencies. While you may use other modes 99% of the time, having those relationships in place before you need them can prevent delays and keep your customers happy.
Talk with your provider about your normal freight patterns and work with them to plan for situations you may encounter as your business grows or your customers’ needs change.
Key takeaways
- Don’t overlook the big picture. Understanding the overall health and effectiveness of your supply chain is critical for making the best business decisions.
- Embrace flexibility. Doing things in new ways can make the difference between success and failure.
- Watch the data. Having insight into your supply chain can help you predict changes and respond as soon as the need arises.
- Share what you know. Communicating with your provider early and often is essential for keeping your supply chain running smoothly.
Explore ArcBest supply chain solutions
With a full suite of transportation solutions and our comprehensive supply chain management services, ArcBest can help you find ways to solve any challenge you’re facing. Contact us for a supply chain analysis or to get help with your daily freight needs. Explore all ArcBest solutions.
