Common Symptoms of the Supply Chain Process
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Common Symptoms of the Supply Chain Process
In a business environment, the supply chain is critical in ensuring that the products produced by a business reach the consumers in time, and the raw materials that the business requires for its production processes reach the company on time. However, there are instances where there could be inefficiencies in the supply chain that might not manifest in good time for the executives to take remedial action (Leukel & Sugumaran, 2019). In such cases, it is important that certain common symptoms of a faulty supply chain are recognized in good time for immediate action to be taken. Symptoms are manifestations of an existing issue, and just like they reveal the existence of an illness in an individual, they also reveal the presence of underlying problems in a supply chain process (Giannakis & Papadopoulos, 2016). Some of the symptoms of a struggling supply chain process are delay in the delivery of either products or raw materials to the company, poor customer service, loss of revenue, high inventory costs, among others.
In the case of poor customer service, it occurs because of a series of reasons. The most dominant reason is changing consumer behaviors and an increase in the number of alternative products in the market (Giannakis & Papadopoulos, 2016). For a company to solve its customer service issues, it needs to conduct market research and understand the changing consumer trends. Consumers might change their behaviors because of different reasons, and the approach that the business was using to engage its consumers might need a shift (Leukel & Sugumaran, 2019). Where the company fails to adapt to the consumer changes, the effect is poor customer service. Once a business understands the changing market dynamics and how consumers’ interests and behaviors are changing as well, then a different approach to consumer engagement can be developed to correct the poor customer service.
On high inventory costs, this can manifest where there are changes in freight and energy costs. Increased labor rates can also have an effect on the realization of high inventory costs. A solution to high inventory costs is the adoption of new technology such as the Transport Management System (TMS) to identify the most cost-effective means of moving goods and services (Leukel & Sugumaran, 2019). Use of Yard Management Systems (YMS) is another way of identifying the existing options in the service market that would minimize the costs that a company incurs in storage requirements (Giannakis & Papadopoulos, 2016). In other operation elements where high costs are realized, using business intelligence can assist in identifying options that would minimize the operation costs.
References
Giannakis, M., & Papadopoulos, T. (2016). Supply chain sustainability: A risk management
approach. International Journal of Production Economics, 171, 455-470.
Leukel, J., & Sugumaran, V. (2019). Supplement to the Article: How product representation
influences the understanding of supply chain process models. Available at SSRN 3386680.