5 Most Common Supply Chain Management Mistakes You Need to Avoid

most common supply chain management mistakes

It’s never a good idea to make mistakes in business. But while some mistakes are not that big of a problem, other mistakes can really hurt your business. Mistakes in the supply chain management fall into that category. Here are the five most common supply chain management mistakes that you should avoid.

1. You are Rushing with the Launch

The idea of launching their new product “now or never” has hurt numerous companies. In their zeal to put their shiny new product in front of the customer, they neglected a number of things, while entangling themselves into huge deals.

Before you launch a new product or protocol, be sure to check if your ordering and distribution system can cope up with it, especially if you expect a high demand, like during big holidays.

2. You are Prioritizing by Spend

Prioritizing or quantifying functions by spend made sense back in the 1990s, but not any more. At the time, it was common to have a single supplier for a certain product or item, but that’s no longer the case.

Today, supply chain managers realize that means that having 1 supplier for 1 item means walking on thin ice so to offset any disruptions, they bring in additional suppliers. The bottom line here is never put all your eggs into one basket.

3. Your Risk Management is Short-Sighted

Supply chain management is nothing if not full of risks. This is why you need to prioritize risk management and make sure your managers are ready and able to deal with all kinds of risks in a proactive and efficient way.

This way, you’ll be able to better react to any problems that arise, whether they have to do with increased demand, not having enough items in stock, poor quality, vendors or something else.

4. You Don’t Know Who is Responsible or Accountable

Who is responsible for the disruptions in the supply chain? The upper management will hold the Chief Procurement Officer or CPO accountable, but who can the CPO hold accountable? When no one is accountable, it creates confusion and lack of clarity when actions are needed.

5. Lack of Security

Security breaches are no uncommon, especially if you are operating online. These days, newspapers are filled with news about one company or other that got hacked. Your supply chain is at no lesser risk in that regard than other areas of your business and you need to ensure that you have sufficient security control. This goes for not just physical, but also (and perhaps more importantly) cyber security.

Additionally, make sure that your vendors don’t disclose sensitive information about your company or customers or do anything else that can harm your business. As well, be sure to monitor the security of your product throughout the entire chain to prevent any theft, or tampering, all the way to the end user.

Conclusion

These were just 5 supply chain management mistakes that you should be aware of. Of course, there are many others, so if you know of any that you think should be included here, let us know in the comments below and don’t forget to sign up for a free Purchase Order Plus trial.

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