5 Mistakes Supply Chain Companies Make that Affect Success

Supply and Demand Chain Executive

By Ken Koenemann

Five Mistakes Supply Chain Companies Make that Affect their Success

The world is changing. Nationalism is growing in popularity both domestically and internationally; here in the U.S., corporate tax reforms are gaining momentum, while trade agreements are increasingly at risk. Each of these developments threaten to impact supply chains—and the people who manage them—significantly in the months ahead.

As these and other global events unfold, many supply chain executives are re-examining their business strategies. According to a new Aberdeen Group study of senior managers at global corporations commissioned by TBM Consulting, companies with best-in-class supply chain performance indicators are actually taking a bullish view. These organizations are focused on U.S. infrastructure spending, free trade zones and trade agreements; other companies, by contrast, are preoccupied with managing costs versus growing their operations.

Regardless of approach, however, nearly every executive surveyed in the TBM/Aberdeen study was concerned about whether their process capabilities are sufficient to weather the changes ahead. There are a number of practices that inhibit agility and limit an organization’s capacity to respond to opportunities for growth, yet best-in-class companies are better prepared in their fundamentals (sales and operations, inbound logistics, inventory management and so on) and are more ready to address supply chain network design issues.

Supply chain organizations often make mistakes that limit their potential for future success. Below are five of the most common, along with steps to mitigate their impact. Read this Supply and Demand Chain Executive article to gain insight on each:

  1. Chasing low-cost countries
  2. Indifference to building good relationships
  3. Less-than-frequent supplier network reviews
  4. Lack of cohesive network management strategy
  5. Insisting on minimum inventories in order to make sales
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