7 Dangerous Pitfalls In Supply Chain Management

The oversight and expertise needed for supply chain management is invaluable. The ability to plan for the worst and solve problems before they occur is a must. Furthermore, those in global supply chain management like United Global Sourcing leverage the available business tools and technologies to get ahead of the fast-paced industry. The success of a supply chain manager frequently relies on not what goes wrong, but how one handles the problems. In many cases, experts in the industry solve issues before they ever become a problem. These experts establish systems to better handle the ever-evolving supply chains they manage on a daily basis. In this post, we will share seven dangerous pitfalls every supply chain manager needs to be aware of, so they can better prepare their solution when things do go wrong–inevitably, they will.

Seven Supply Chain Manager Pitfalls to Avoid

It’s not what goes wrong, but how one handles it. This is a universal creed among supply chain managers, and it’s a well worn badge of honor for those who’ve survived and thrived within the industry. Nonetheless, here are seven pitfalls supply chain management need to avoid:

Pitfall #1 - Improper Inventory Control

Do you have too much or too little inventory? It’s imperative you know this and adjust accordingly. Purchasing too much inventory place you at risk for a loss, if the inventory goes obsolete or discontinue selling. On the other hand, if you purchase too little inventory, you can fall behind when demand increases. The balance between too much or too little is a skill you want to master. There’s no secret formula here. It takes smart planning, attention to detail, and careful monitoring trends, historical and current.

Pitfall #2 - No Back Plan

If you don’t have a backup plan for each touchpoint in your supply chain, you could take losses if a manufacturer can’t meet demands or a supplier fails to provide. It’s best to have a plan B for when this does happen–trust us; it will happen. It’s always good to have a backup manufacturer, supplier, etc.

Pitfall #3 - Lack of Transparency

Supply chain management is built on communication. Without communication, supply chains will ultimately fail. That’s why transparency is ever-important in the success of supply chain efficiency and effectiveness. It’s best to know if a manufacturer, supplier, or shipper is running behind schedule so the supply chain manager can make better decisions. Withholding this type of information can deteriorate trust and ruin the chain’s effectiveness to deliver. Foster candid communication with all touchpoints in the chain to create transparency for better decision making.

Pitfall #4 - Lack of Traceability

When something goes wrong in a supply chain, it’s best to be able to trace it back to the exact point of error. Supply chains that don’t have comprehensive traceability run the risk of inefficient operations. If the supply chain manager is not able to identify and fix an error, it will continue to cost the chain money and delay the deliverables.

Pitfall #5 - Big Focus

It’s easy to focus only on the 10,000 foot level operations, but this is a huge pitfall. Attention to detail should be a huge focus for supply chain managers. Every transaction is an opportunity for supply chain optimization. Constantly testing new routes, suppliers, manufacturers, and more is the key to increasing profits. Furthermore, don’t neglect your smaller supply chain participants because your larger ones make up the majority of your balance sheet. Every piece to every chain matters, so it has to treated as such.

Pitfall #6 - Micro-Management

It may seem tempting to manage every aspect of your supply chain. In pitfall five, we even suggested you focus on the small things more than the big picture. Frankly, you need to do both. However, don’t allow delegation to be a dirty word in our supply chain. First, supply chain managers tend to not have the time to micromanage every aspect of the chain. Second, the cost to delegate is worth the profits made.

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Pitfall #7 - Ignoring Red Flags

As a supply chain manager, it can be easy to miss or ignore the red flags that something is about to go wrong. In any case, it’s better to identify the warning signs early and proactively resolve the potential problem. It may cost more up front to resolve it early, but it saves down the line tenfold. Establish some intermediary deadlines and budget reports to find those red flags earlier before a crisis explodes.

United Global Sourcing: Your Supply Chain Manager

It’s easier to delegate than it is to handle it all on your own. United Global Sourcing is a global supply chain company that helps you find, establish, and implement effective supply chains around the globe. We leverage our vetted manufacturers, suppliers, shipping companies, and more to get you what you need. When you choose UGS, you get top-tier quality and excellent communication.

Ready to discuss supply chain management services? Contact us today!