Challenges in Supply chain

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Challenges faced by supply chain executive operating in the global environment and risks
involved

Efficient supply chain management is

crucial for survival and success in a
turbulent world. Current economic crisis
increases its im-
portance even further
In this turbulent global environment, efficient supply chain management is quite
crucial for the existence and growth of the business corporations. Its importance increases
further because of the economic crisis all around the globe. Furthermore, present supply
chains are developing in multifaceted nature because of many elements. Pertaining to this,
supply chain executives are facing numerous challenges, as customers are requesting
inventive items at the perfect time and at a sensible cost (Harrison, 2003). This make it
difficult for the managers since making both responsive as well as financially savvy supply
chains is fundamentally troublesome. Other than this, the issues and problems being faced by
the supply chain executives can hamper their capability of shipping the products quickly and
efficiently. Such issue might have cascading destructive impacts on the entire supply chain
management as well as strategy of the organizations. Some of them are described underneath:
 Information technology security threats – Irrespective of the mobile data
accumulation solution being used by the managers for making improvement in the
entire flow of operations, there are certain things that managers are required to do.
According to the Cyber Security Intelligence report, there are around 52,855,311
security events that took place in the year 2015. All these events usually depicted
some kind of positive as well as negative attack for gaining access to a network
without having permission or right (Prater, et al., 2005). Regardless of the automated
data accumulation solution being used by the organizations, information technology
security threats is a challenge for the supply chain managers. It is vital for the
managers to make use of best cybersecurity software. Complete evaluation of the
suppliers and their supply chain should be done as the hackers constantly penetrate
organization’s information technology infrastructure

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  Increased 3PL options – Focusing in relation with the third party logistics service
options, it is being referred as a link in the supply chain brands being used for
outsourcing some component or all distribution of the business and fulfilment
services. Additionally, it offers varied kind of services to customers such as
warehousing, distribution, transportation and freight services. 3PL options generally
encompasses firms which are specialized in shipping and storing products.
Furthermore, it is being utilized for saving time, reducing costs and increasing the
production level and space (Caudell, 2017). Increase in the 3PL option is a possible
issue for supply chain executives, as they might become astound with the massive
quantity of third party logistics service options presented beforehand and thus, there
are chances that the managers might select the incorrect option.
 Cost control – In this present business environment, operating costs is rising and will
continue to increase in approaching years as well. It is a challenge for the supply
chain managers to watch the way increased level of technology, energy and fuel
prices influences the shipping products. In addition to this, the executives are also
required to be more heedful of possible increase in the minimum wage which might
have harmful impact on the bottom line of the firms. For instance, the supply chain
manager of the Walmart also faces problems related to cost control. Because of the
increasingly expensive labour market, company faces issues related to increase in
inventory turnover and lower costs (Abbaterusso, 2010). Walmart has also relied on e-
commerce for increasing the turnover. Nevertheless, they still incurred costs for
shipping materials to their patrons. This is because the firm is offering the facility to
pick up materials at their stores which decreased the amount of shipping endpoints.
 Continuous relying on manual data processing – In the current era of globalization,
more and more firms including Walmart are switching towards mobile data
accumulation for rationalizing their supply chain management operations and
strategies. Many advanced systems like voice-picking solutions can make sure
seamless order precision that in turn supports in reducing the costly returns and can
also help in enhancing the level of production and speed of shipping & delivery.
There are still numerous organizations which are making use of manual data
collection solutions (Forbes, 2016). Nevertheless, for the firms who selects entering
and extracting data manually, it is vital to consider several things such as processing

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 of manual data is incompetent and more disposed to error. In contrast, mobile
solutions allows the supply chain managers to analyse the information in actual time.
 Building a great team – One of the greatest challenge being faced by supply chain
managers is constructing a supply chain management team which can adjust with the
ever changing business environment quickly. It is not an easy tasks though it is not
impossible as well. There are several think that the managers are required to consider
for building a great team such as experience in the supply chain management, division
of labour, cultural expertise and a strong comprehension of the ways events in the
supply chain influence the other departments within the firm (Dittmann, 2014). Hiring
a correct employee is difficult, however if done accurately than it can decrease the
mistakes that might improve the data collection processes.
Consequntly, it can be said that supply chain debatably come across with several risks
as compared to other domain of the company in the global business environment. Numerous
risks are being involved such as regulatory compliance, supply shortages, quality issues,
safety challenges, delay in supply due to global customs and environmental compliance. All
these poses great challenges to the supply chain executives (Manu & Mentzer, 2008).

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REFERENCES
Books and journals
Abbaterusso, J. (2010). Supply chain management at Wal-Mart. Ivey Business School.
London, Ontario: The University of Western Ontario.
Harrison, A. (2003). Competing through supply chains. Department of Management Science
and Technology. Athens University of Economics and Business.
Manu, I., & Mentzer, J.T. (2008). Global supply chain risk management. Journal of Business
Logistic, 29(1), 133-150.
Prater, E. & et al. (2005). Future impacts of RFID on e-supply chains in grocery retailing.
Supply Chain Management: An International Journal, 10(2), 134-142.
Online references
Caudell, D. (2017). Top 5 Supply Chain Management Challenges Managers May Face.
Retrieved from https://www.rfgen.com/blog/top-5-supply-chain-management-
challenges-managers-may-face-in-2017/
Dittmann, P. (2014). Managing Risk in the Global Supply Chain. Retrieved from
https://www.scmr.com/article/managing_risk_in_the_global_supply_chain
Forbes. (2016). The world’s largest retailers 2016: Wal-Mart dominates but Amazon is
catching up. Retrieved from
http://www.forbes.com/sites/laurengensler/2016/05/27/global-2000-worlds-largest-
retailers/#110913629a9e

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