Supply chains are important to any business. Not sure what one is and how it will affect your company? Well, a supply chain is basically the process of getting a product to a customer. The chain begins at the production stage and then sees the product being shipped to the distributor. The distributor then sells or ships the item on to the customer. You are most likely to be this middle link in the chain – the shop that is actually selling the item. As your company is right in the middle of the supply chain, it will greatly affect how you do your business.
So, there is no wonder that a poor supply chain can mess up your business as it could cause late deliveries. If that happens, you might run out of stock and might not be able to fulfil all your customer orders. But why do these chains fail so often? Here are some reasons to help you better understand them.
Image: Free photos
They Are Too Complex
The supply chain that I described in the introduction is a very simple one. In real life, they are rarely ever that simple! They can be a whole lot more complicated with lots of different links making up the chain. But complex doesn’t always mean better. In fact, the more complex a supply chain is, the more likely it is to fail. A simple supply chain with fewer links has less chance to go wrong and fail. So, if possible, try and only get into chains that are as short as possible.
Offshoring Can Be Difficult To Manage
Sometimes, supply chains can cross a couple of different countries before they finally end up with the customer. Over the past few decades, modern shipping methods have helped to improve offshoring, but this still poses a big problem. If you are worried with your own supply chain’s offshoring efforts, you might want to speak to a supply chain consultant about the various improvements that can be made to ensure that mistakes are kept to a minimum. They’ll be able to let you know if there are any pointless links in your chain that can be cut out that might even help you stop offshoring completely.
Image: Mikes Photos
Too Many Costs Can Reduce Quality
There are some aspects of supply chains that can be quite costly for all of those involved. For instance, transporting fresh meat requires specialist refrigerated trucks, which can be very expensive and will bump up the overall cost of transporting the products. To try and overcome these costs, some suppliers will cut costs in other areas. Making cuts should always be avoided, though, as it can reduce the overall quality of the product. If you do need to cut some costs, make sure that they don’t reduce the quality in any way, as you will pay for it in the long run as it won’t be as easy to sell.
Once you understand why some supply chains fail, you will be able to improve your own!