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Characteristics And Problems Of Supply Chain You Should Know

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Characteristics And Problems Of Supply Chain You Should Know


The Global Supply Chain Forum defines Supply Chain Management (SCM) as an integration of business processes from end-users to early suppliers to provide products, services, and information that add value to Customers and other related parties.

The added value for customers is related to the demand that is mainly related to the product needs with the right type, the right quantity, the right place, the right time, the right quality, and the right cost.

Uncertainty In Supply Chain 

SCM aims to meet customers ' demands involving the perpetrators and related parties in the chain of
It's supply. In a supply chain, there is uncertainty. This uncertainty is caused by various factors, including demand and supply aspects.

Demand Uncertainty 

1. Product Variations

• Product Variation Required or requested by the customer diverse. These variations include in brands, sizes, etc.

2. Product Quantity Variation

• Customers need product in quantities diverse. For a product, for example, a Customers need products in small quantities (in the unit), while the customer others need it in number of lots (in carton or pallet).

• The difference in Query quantity, high Customer will increase uncertainty Supply chain.

3. Lot size Difference

• The lot size of a product, I need a different customer. For example, for a Certain products, customers need a product in packaging containing 12 units, while at other times or other customers need the product in the packaging which contains 24 units.

• The difference in this lot size will influence the uncertainty of Supply chain. Difference more and more lot size will increase uncertainty Supply chain.

4. Response Time

• Request Response Time can very varied. For products pharmaceutical, for example, the response time request from a pharmacy or home pain can be very loose. However product request response time pharmaceutical for emergency conditions (e.g. for operating purposes) can be very narrow.

• When the response time, It takes narrower it will resulting in uncertainties the supply chain.

5. Service level

• Varied service levels, depending on the characteristics customer and level. His needs at that time. Delivery of a spare part for emergency conditions In the oil drilling area, for example, should be as soon as possible. However, delivery of spare parts same for backup purposes maintenance can be made within the timelLonger.

• Request service levels high will increase the uncertainty in the Supply chain.

6. Sensitivity to product prices

• The price of products that can be received customers may vary. To certain conditions, the price of the product not sensitive to customers. However, in other conditions, the price of the product will be sensitive.

• For most customers, respect the products in supermarkets, for example, quite sensitive. Most customers buy products in supermarkets in large quantities as monthly spending for everyday purposes. However, the prices of the products inconvenience stores are not be sensitive. Our customers only at any time buy product there mainly because location and in small quantities.

• Product price is sensitive, resulting in a chain uncertainty, the supply becomes high.

Supply Uncertainty 

1. Product quality

• Quality of products can be produced differently or change depending on some factors. Related to the cycle life products, for example, quality product during the introduction is usually lower than the next time quality. This product may also change because of the quality of raw materials, conditions of production machines, operator proficiency, and others.

• When the product quality low then uncertainty, the supply chain becomes high.

2. Product innovation level

• Product innovation level demonstrated from the frequency of changes the product. Innovation level the high product can be seen on the mobile phone product. Conversely, the level of product innovation  The low level can be seen materials of necessities, such as rice, sugar, cooking oil, And so on.

• If the Product innovation high level the uncertainty of the chain, the supply will increase.

3. Capacity Production limitations 

• Production capacity shows number of products that can be produced within a time certain. Production capacity have limitations e.g. related to the capacity of production machines used, the availability of operator, and so on.

• Limited production capacity resulting in uncertainties the supply chain.

4. Flexibility of production capacity 

• The company can do changes in production levels, the number of products generated in a process production. Nevertheless, these changes can not always done easily because there are limited the flexibility of production capacity.

• The flexibility of production capacity, the low will increase the supply chain uncertainty.

5. Disruption of production facilities 

• Production facilities can be experienced interference result in the production process stopped a while. Such interference power outage, damage to the machine, and others.

• High frequency of the interference will increase the uncertainty in the supply chain.


Demand uncertainty vary from level low uncertainty to high. So, it happen also on uncertainty Supply.

• Expected SCM implementation can anticipate or managing uncertainty. The Management can be done from the supply side or requests, Although in practice much more from the side supply. This SCM implementation by selecting and use strategy appropriate.

The following are the 3 common problems commonly faced by manufacturing companies.

1. Poor Inventory Management

Strict control of inventory management has become a vital action to improve efficiency. Although a manufacturing company that you own has a very good process, it is important that you always control the stock of your goods. So you can know your inventory. 

It will all be a pretty time consuming what else if you are working on logging your supplies manually. Different if you use modern ERP program that able to provide efficiency in manufacturing process where you can work various business processes as well as various aspects of your company quickly.

2. Inadequate Quality Control

Customers always have the ability to be unforgiving, what's more in today's social-all day. Ultimately, this age increasingly demands us to always ensure that the quality we have must always be good from the beginning of the creation to the end of the product completion. It is certainly not easy, but having a system that handles manufacturing problems quickly and efficiently will help you.

3. Supply Chain Problems

There is a time when manufacturing companies should have everything they need whether it's raw materials or other components of their suppliers. But sometimes there are some problems with the supply chain such as price fluctuations, supplier reliability and quality control among suppliers. For that you need a modern supplier control where you can receive updates so that you can react when a problem comes in.

I hope this article will increase your knowledge.

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