Any mistakes that happen during the supply chain process can be very costly. Either the cost is immediate and catastrophic or they can take time to notice as you bleed profits over a sustained period of time. It is very important to ensure that your supply chain management is working perfectly, this will help to prevent the loss of potential earnings.
1. Putting all your eggs in one basket
When it comes to your supply chain management you need to ensure that you avoid prioritizing by spend. If you place a higher priority on the providers that you spend the most money with you may find that if they fail to deliver or are no longer able to deliver what you need you have lost a big link in your chain.
If you balance your supply and logistics options more evenly, you will be able to ensure that your bases are covered and that you are able to respond quickly to any unexpected changes.
2. Make sure everyone knows who is accountable
The roles and responsibilities of your team need to be clearly outlined. This means that every step in the supply chain process needs to have someone directly overseeing it and responsible for its success. If the lines here a murky then you could potentially run into problems where mistakes are made.
If everyone knows that they will be held accountable should there be an error then you can be sure that extra attention will be paid to each and every step. This is also something to consider if any of your team is absent from work, through wither sickness of vacation. You will need a plan in place so that nothing is missed during this time when you are shorthanded. Having a detailed document that includes everyone’s roles and responsibilities will allow you to nimbly respond to any personnel shortfalls.
3. A lack of oversight
With so many suppliers on the books and many moving pieces in your supply chain, it can be very easy to gloss over a few details as long as they are working well. This could be something as simple as not understanding that a part is dual or single-sourced until it is too late. The best thing to do in this situation is to make sure that you have a clear handle on the relationship that you have with each supplier so that if there are any issues you can respond in the correct manner and not jeopardize the operation further down the line.
4. Not looking to the future
Even though everything is working well today, it does not mean that there is potential for the supply chain to break down in the future. A fully optimized supply chain will experience several risks including but not limited to delivery delays, supplier issues, quality problems, increase in demand, and supply shortages.
While these are expected challenges which all managers should be aware of and prepared to tackle, it is nearly impossible to address all of them at a go. You’ll be required to solve the challenges dynamically – one after another. This can deny the management the chance to proactively assess problems in the supply chain as a whole.
5. Reacting to situations instead of preparing for them
If a mistake is made or a problem arises then you will need to act to fix the situation. What many supply chain managers fail to do is try to understand the root cause of the issue. Supply chain organizations are encouraged to develop the right infrastructure for proactive management where you create clear paths of communication in case of a crisis and use rewards rather than punishments to encourage employees to play their roles.