East Lansing-based Michigan State University partnered with the APICS Supply Chain Council to identify critical issues on the minds of supply chain leaders.
To compile the report, the groups interviewed leaders from more than 50 firms across the globe and asked them: “What keeps you awake at night?”
Here are the six most common issues on supply chain leaders’ minds, as identified in the report.
1. Capacity or resource availability. Many companies expecting market growth cited managing capacity issues as a main priority. They often wanted to avoid outsourcing and identified challenges to maximize their facilities’ capacity by replacing old equipment, among other activities.
“We’ve implemented a supply chain for a point in time,” one leader said, according to the report. “However, a supply chain is a living, breathing thing, and one needs to think about it as dynamic and impermanent. Is there a point where the supply chain becomes inappropriate for where we’re going, and we need to build a different kind of supply chain?”
2. Talent. Participating companies also described the struggle to find and keep good supply chain talent.
“The competition for talent is much higher [than it’s ever been],” said another participant in the report. “You go out to the market, and it’s one of those ironies. Right now, you put a job description out there, and you hear about 8 percent unemployment. However, I can’t find an industrial engineer worth his salt — you know, someone who can really think about strategy and think about [profit and loss statements] and drive change.”
3. Complexity. Some firms faced issues with their products becoming more complex and found it difficult to manage the increasing amount of stock keeping units.
“We’ve started building different types of products, completely new types of products. Whether it’s low or high volume, it creates another level of complexity,” said one leader in an interview.
4. Threats or challenges. A lot of supply chain leaders are worried about managing supply chain risk, and many mentioned the importance of continuity planning.
“I worry about supply risks in general, whether it’s from natural disasters or things like … a troubled supplier or a variety of issues with the whole supply chain risk piece,” one participant told researchers. “Partly that’s because that stuff is hard to control. You can try to proactively mitigate the downsides, but that’s just hard to control.”
5. Compliance. Participants cited numerous compliance issues like product regulation, trade controls and continually changing regulations, according to the report. Many leaders said they were struggling to keep up with both the high volume of regulations and how much they constantly changed.
“[The changes] are really causing us to spend a lot of money and a lot of our time. It is sucking up a huge amount of our information technology dollars and resources to be able to be compliant with those regulations,” said one study participant.
6. Cost or purchasing issues. While pressure to rein in costs is a focus for companies in every industry, it’s a top priority for healthcare and drug companies amid the shift toward value-based care, according to the report.
“Everything in healthcare is submitted through insurance for reimbursement,” one leader said. “The government won’t pay you any more to treat your patients, so you better get [the payout from] your suppliers. Well, we’re the supplier they’re coming after.”
To view the complete report, click here.
HENRY KOTULA 