For any business, managing their supply chain is a necessity that shouldn’t be overlooked. Successful suppliers such as Transmed, who is in the fast moving consumer goods industry – FMCG have turned to streamline their supply chain management systems into an art.
However, not all businesses pay such close attention to detail. Mistakes in this area can not only cause delays in shipping but can also jeopardize the overall performance of the business.
Wondering which supply chain mistakes can jeopardize your business? Take a look at the ones below:
1.Not Changing with the Times
Old fashioned businesses have old fashioned supply chain systems. It’s also very natural to feel that if something is working, it shouldn’t be updated or changed.
However, take a closer look at the supply chain practices of your business and the current market place. Are you truly being productive with a 15-year-old supply chain management system? Always evaluate and make changes as needed.
Not changing the system can result in grievous errors that could stunt your business’s growth in the market.
2.Poor Testing Practices
When you’re making changes in the supply chain management system, always take the time to test, check and make adjustments as needed. While time constraints do have to be kept in mind here, you can shouldn’t rush testing.
Otherwise, you’re bound to face errors when you’re working. This is exactly what Hershey’s faced in 1999. They didn’t give enough time to test their new supply chain management system and ended up being unable to deliver their products to stores before Halloween.
This delay caused Hershey’s loss of 8% of their shares. If they had taken the time to test out the system beforehand, they wouldn’t have faced this issue.
3.No Risk Management Strategy
It’s a given that any company will face risks with their supply chain management system, regardless of how well maintained they are.
For this reason, risk management strategies have to be devised. Common risks that are handled with these strategies include:
- Issues in quality
- Surge in demand
- Shortage of supplies
- Issues with suppliers and delivery problems
Unfortunately, most businesses tend to use a “we’ll see when it happens” approach. However, in the current marketplace, this can cause a lot of consumer backlash which can ruin the business’s credibility in the market. Having a risk management strategy can help you navigate these tricky scenarios.
Nowadays, consumers and businesses alike are being economically and socially responsible in every area. This even means the supply chain system. With a higher demand for ethical responsibility, more businesses need to practice accountability in their supply chain management too.
An example of this can be seen in the backlash that Welspun India faced. While they primarily produced cotton sheets, they wrongly advertised them as being Egyptian Cotton. When this was pointed out, the company tried to plead ignorance and blamed the suppliers. The company ended up losing 50% of its value due to this and major stores like Target cut all ties with the business. Accountability in all stages of the supply chain management system is a major necessity.
As you can see, these mistakes might be small but they can have serious ramifications for businesses.