CHALLENGES

Challenges  

Why is supply chain management difficult?

       ->Different organizations in the supply chain may have different, conflicting  objectives

•        Manufacturers  : long run production, high quality, high productivity, low                                                               production cost
•        Distributors      : low inventory, reduced transportation costs, quick replenishment                                            capability
•         Customers      : shorter order lead time, high in-stock inventory, large variety of                                              products, low pricesSupply chains are dynamic                                                                        - they evolve and change over time

   ->Supply chains are dynamic - they evolve and change over time.

Diagram 12 shows some challenges of SCM

Diagram 13 shows the challenges from supply-side and demand-side

Diagram 14 shows the challenges, services and benefits of SCM

Supply chain RISK !!!

• More reliance on supply chains means more risk
• Fewer suppliers increase dependence
• Compounded by globalization and logistical complexity
• Vendor reliability and quality risks
• Political and currency risks
• Mitigate and react to disruptions in
• Processes
• Controls
• Environment