When it comes to managing supply chains, the people in charge have several issues to deal with. Each issue facing your supply chain manager has implications for your company—including its bottom line and its customers—so it’s important to keep these issues in mind when developing and analyzing your supply chain.
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Managing inventory goes beyond counting how many boxes of pencils are sitting in your warehouse. It involves keeping enough inventory on hand so your company can be flexible while meeting all customer and client expectations. Timing orders appropriately will ensure all items (or components of an item) arrive at the designated time without your company facing major delays. This also involves carrying enough stock so your company doesn’t run out—but not so much stock that profits are affected.
Along with managing inventory comes managing suppliers. Supply chain managers are responsible for knowing when they need multiple suppliers for one item, dealing with suppliers when there are delays and ensuring all orders received meet quality controls. They’re also responsible for finding suppliers with consistent and reliable service at a price that doesn’t hurt your bottom line.
Maintaining Safety and Quality
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The globalization of your supply chain can be paired with concerns about the quality of products that are made in other countries (or contain components from other countries) that may not meet regulatory standards. This puts companies at risk of recalls. This means that supply chain managers are responsible for ensuring suppliers and their products maintain safety and quality standards. Recalls or safety issues can damage a company’s reputation and affect things like cash flow.
Supply chain managers are responsible for ensuring their company isn’t devastated by problems with a supplier. Companies that are too reliant on one supplier are vulnerable if that supplier can’t meet demands. This means that supply chain managers must mitigate risks, so an earthquake in Asia doesn’t halt the production line in North America, for example. They have backup plans to ensure that if one supplier goes bankrupt, their company’s supply chain continues on without profits being affected.
Supply chain managers have a complex job. They factor in all the risks along their supply chain, ensure the company has the supplies it needs when it needs them. They’re also always working hard to reduce any recalls or safety issues. Supply chain management is something that often goes undetected when it’s going smoothly—those who are good at it make it look easy, even though it rarely is.