10 Supply Chain Management Challenges Facing Global Supply Chains

Supply chain management challenges are an unfortunate reality of doing business in the modern world, and these ten supply chain management challenges facing global supply chains are no exception. These challenges may represent serious threats to global supply chains, or they might just be minor speed bumps on the road to greater efficiency and profitability. Either way, recognizing these problems and implementing the necessary changes to solve them is vital to ensuring that your company stays profitable and continues growing.

1) Too many Barriers

Supply chain challenges are increasing due to a variety of factors including too many barriers. The more complex global supply chains become, the harder it is for companies to efficiently meet their customers’ demands. In some industries, there may be as many as 20 different barriers that limit productivity and hurt operations. Shipping goods globally often includes multiple modes of transportation, varying customs and tariffs along with other logistical challenges, depending on where your product was made and where it will be sold. Simply put, supply chain management is no easy task these days; better solutions are needed if companies want to keep up with increasingly global demand. Fortunately, innovative solutions exist for almost any type of business; one option is creating strategic partnerships in order to lower costs and share resources.

2) Data Flows Are Vulnerable

The digitization of supply chains has made information about their operations and physical assets more readily available. Unfortunately, it’s also increased their vulnerability to cyberattacks and theft. Supply chain disruptions can have serious implications for businesses in terms of both revenue loss and damage to brand reputation. For instance, Toyota has seen its sales plummet since it was forced to recall millions of vehicles due to a series of unintended acceleration cases that may have been caused by hackers tampering with vehicle software. Manufacturers in particular should consider investing in cybersecurity solutions such as firewalls for their IT networks or tamper-proof containers for physically transporting sensitive materials on an intercontinental basis.

3) Disparate Systems

Supply chain systems are often siloed, which makes for an inefficient system. The current state of global supply chains is one in which disparate systems are used to send and receive information and materials that can’t be seamlessly integrated. The lack of effective integration leads to wasted effort and costs for companies worldwide, while throwing off their supply-and-demand cycles. If you take help from a china sourcing company, they can easily help in making your systems efficient.

4) Security Breaches are Rampant

We hear about supply chain security breaches on a seemingly daily basis. This is why it’s so important to protect your assets, employees, and reputation at all costs. The steps you take today could make or break your supply chain tomorrow!


5) Dangers Are on the Rise

Supply chain threats such as data breaches, product recalls, natural disasters and political unrest have increased in recent years, according to a survey by Deloitte. And it’s not just physical risks that are on an upswing. Cyberattacks, supply shortages and geopolitical instability are increasing as well. The survey also found that 78 percent of those who had experienced one or more incidents within their supply chains say they were more likely to occur again over time because not enough has been done to prevent them. Without intervention and better systems for protecting supply chains, these issues will continue to grow in prominence.

6) Cyber Attacks are Widespread

According to a 2016 study conducted by DHL, 83% of global executives expect their company to be hit by a cyber attack in the next 12 months. The study also found that 87% of companies had experienced one or more cyber attacks in 2015 alone. These attacks aren’t limited to major corporations, either: According to FBI estimates, Americans suffered losses of approximately $675 million from internet-based crimes in 2014. Small businesses are especially vulnerable and could suffer millions—if not billions—in losses over time. Cyber security is now one of top priorities for any company doing business internationally because protecting your customer data and intellectual property has become mission critical for every organization no matter how big or small.

7) Businesses Aren’t Prepared

For decades, supply chain management has been a priority of businesses across all industries. Thanks to rapid technological advancements and emerging globalization strategies, global supply chains have become increasingly important, especially for companies that are looking to expand into international markets. Yet according to a recent survey by Schneider Electric, nearly 60 percent of business executives say their company’s supply chain performance is only somewhat effective. Schneider found that even fewer companies (just 44 percent) consider their supply chains fully optimized or ready for advanced projects such as business analytics and predictive maintenance. Overall, an overwhelming 68 percent of respondents reported struggling with visibility.

8) Smaller Companies Can’t Compete

Smaller companies can’t compete with supply chains that are global in nature. In large enterprises, cross-functional departments like purchasing and planning often have to cooperate closely to optimize their processes and deliver high-quality results. Smaller companies, however, don’t have access to such broad and complex resources which makes it more difficult for them to compete on a global scale. If you run a small business or work for one, there is a lot you can do to stay competitive – but first, you need to be aware of how you stack up against your larger competitors. One way of addressing your supply chain management challenges is by partnering with an outside company that specializes in international logistics.

9) Unfair Competition is Rampant

The increasing global competition has led to unfair price competition. The cost of labor, shipping, and access to technology all vary widely from one country to another, making it possible for a company in India or Vietnam to sell its products below cost in order to take business away from its domestic rivals. Moreover, when companies fail to compete on quality or innovation, they often take advantage of supply chain information asymmetry (IBM 2011) as a way of gaining an edge over others in ways that are often illegal.

10) It’s Difficult to Partner Effectively

Partners are an essential element of any business, but partnering with a company halfway around the world creates new problems. It’s difficult to build trust across different time zones and cultural barriers, especially when you have limited experience working with that company. 

You can overcome these challenges by making sure your partner adheres to a formal contract that both parties sign and then keeping in regular contact over email or phone. All too often, supply chain management is hampered by ineffective partnerships: make sure yours isn’t one of them and take help from any good China sourcing company if required!