10 Common Supply Chain Errors (And How to Avoid Failures)

Common Supply Chain Errors
Common Supply Chain Errors
Common Supply Chain Errors

10 Common Supply Chain Errors (And How to Avoid Failures)

When costs are decreased, profit margins increase. This is a fundamental truth in business. There are several ways to cut costs, and mastering your supply chain is at the top of the list. (Not doing so leads to costly mistakes.) Today we present 10 common supply chain errors and how to avoid them, according to Enterprise Apps Today.

  1. Lack of supply chain transparency: End-to-end supply chain visibility is key to maximizing efficiencies and your future risk management efforts. Map your business processes, from concept to customer, to make more educated decisions about your business.
  2. Ignoring supply chain data: Big data is important at every stage of your business. From marketing analytics to inventory quantities to profit margins, all information is important. Supply chain data is sometimes ignored as insignificant, but overlooking supply chain data is a big mistake. Make sure you're utilizing supply chain data appropriately to make wiser business decisions.
  3. Not planning for business disruptions: Having supply chain risk plans in place is key to running a smooth business. When the inevitable happens, you will be prepared to keep your customers from being affected.
  4. Choosing too many partners: Although you want to be prepared, there is such a thing as having “too many cooks in the kitchen.” If there are too many contractors, too many suppliers, too many shipping companies, so on and so forth, you introduce more complexities than the reduction of risk is worth. Investigate and find your right balance.
  5. Going too lean: Many of our blog posts center around going lean. Don't get us wrong; lean is good, but being too lean can cause issues. For example, if a supply chain is too lean it becomes fragile and susceptible to failure from even minor events. According to Enterprise Apps Today, “There needs to be a balance between efficiency and resiliency.”
  6. Lack of cyber and physical security controls: There is a severe lack of intellectual property security measures in our industry and country, which is alarming. Utilize secure file transfer protocols, and implement restricted access. Also, consider physical security barriers (locks and seals) to decrease product tampering.
  7. Lack of optimized business processes: Understanding what comes before AND after your business is crucial to optimizing your supply chain and business plan. (After all, loss of revenue can occur when a customer returns a product.) Prepare for this with a supply chain that is optimized from concept to customer, and beyond.
  8. Not aligning application design to a business strategy: If your supply chain is only aligned with one specific type of business, it will be difficult for you to acquire or change to other products or businesses in the future. Understand your long-term growth plan, and align your supply chain for now and the future.
  9. Not creating effective vendor relationships: Yes, price is definitely important when choosing a supplier. However, employee relations and customer service also are important. Finding someone who is willing to be a partner is much more beneficial to your overall business than a few pennies saved.
  10. Operating in silos: Organizations that operate as networks operate much more efficiently than organizations that operate in silos. Make sure your teams are collaborating with one another and are customer-centric in their approach.

Is your organization making any of these common supply chain mistakes? Graduate-level education from Kettering University Online can help you master the decision-making tools necessary to design value in your global supply chain, from concept to customer. We offer an online Master's degree in Supply Chain Management. Specific learnings include:

  • The decision-making tools necessary to design value in the global supply chain, from concept to customer
  • The decision-making process of demand forecasting and enterprise planning for the purpose of increased profit and value to stakeholders
  • Basic concepts in strategy, forecasting, demand planning, inventory control and value stream mapping
  • The integrated approach to enterprise planning and its evolution from MRP I and MRP II
  • The core structure of ERP systems and the characteristics of emerging ERP-based organizations
  • The fundamental success factors in moving from traditional business functions to an integrated, process-based ERP environment
  • A conceptual framework for understanding Supply Chain Management (SCM)
  • Concepts, trends and technologies that enable global SCM
  • How customer needs, competitive advantage, operational measures and financial performance support successful implementation of SCM
  • How operational activities including information systems, procurement, demand planning and forecasting, inventory management and logistics support organizational goals