Supply Chain Disruptions: The Enterprise Killer
In business, there are problems and then there are problems. Some cause a momentary setback, a period of embarrassment, or a dip in revenue. Others put a company on the kind of shaky foundation that makes long-term success either elusive or impossible. Knowing how to spot the kinds of systemic problems that kill companies is crucial. And knowing how to solve them before reaching a point of no return is literally an existential concern. To help you get the process started, it’s important to understand how supply chain problems create ongoing disruptions and escalating disasters.
- Cost Overruns – It only takes a minor supply chain issue to create major new costs. A single bad shipment, manufacturing mistake, or missed deadline deals a significant blow to the bottom line. And any supply chain that is not as productive or efficient as it needs to be simply bleeds funds on a monthly basis.
- Quality Control Issues – Ensuring that products conform to the highest standards on a perfectly reliable basis is a challenge for any producer. But the more ineffectively a supply chain is organized the harder it becomes to control quality. Products fall short of standards unpredictably but continually.
- Scheduling Delays – For a supply chain to serve the interests of everyone involved, it must operate with the precision of a Swiss watch. Delays of weeks, days, or even hours can seriously compromise production schedules, put sensitive materials in jeopardy, degrade the confidence of suppliers, and lead to lots of lost revenue.
- Rippling Effects – The interconnected nature of supply chains is an asset when things are firing on all cylinders. But when issues arise whether in-house or at other points along the supply chain the effects are felt by all. Companies that commit to a less-than-perfect supply chain find themselves at the mercy of systems they have little means to control or perfect.
- Consumer Complaints – It may be possible to gloss over supply chain problems as long as the finished products are still selling well. But as the problems mount the quality of the products is inevitably reduced. And consumers who have to deal with products that are unavailable, poorly built, or more expensive than advertised will quickly seek out the competition.
- Morale Problems – Trying to prop up a malfunctioning supply chain is a huge burden on staff at all levels. Much of the workday is spent in crisis mode, and every step forward is followed by two steps back. This is incredibly demoralizing for employees and leads directly to lost productivity, poor retention rates, and persistent staffing struggles.
- Strategic Uncertainty – It is extremely difficult to develop actionable plans for the future when supply chain problems appear over and over. Rather than looking forward, decision makers must focus on the latest mess affecting the present. And rather than think about strengths, decision makers must focus on weaknesses and vulnerabilities.
Some companies contend with a few of these issues and others struggle with them all at once. In either case, they lead directly toward failure. The question then becomes, how do you solve more supply chain issues in less time? Historically there has not been an easy answer to that question. But thanks to technological advances related to data management it’s possible to gain perspective and control over even the most complex global supply chain. Companies are relying on thing like ERP supply chain solutions to identify where problems are located and what sorts of resolutions are possible. In short order these companies smooth out points of friction, learn to forecast issues in advance, and generally have more agency over the supply chains they depend on so deeply. Take control of your supply chain – before things get out of hand!