Close
Close

7 Biggest Supply Chain Pain Points and How to Solve Them

MHC Marketing    November 1st, 2022

The international supply chain has spent a lot of time in the news over the past several years, and that doesn’t seem likely to change any time soon. Factors like a global pandemic, strained relations between the United States and China, and the ongoing war between Russia and Ukraine have created an unprecedented number of complications in the business operations of nearly every industry.

The roots of these supply chain challenges are too diverse and complex to explore at length here, but their impact is obvious. Orders are delayed and canceled at a higher rate, goods and raw materials that were formerly easy to get have become much more scarce, delivery costs are rising, customers are losing patience, and supply chain employees are feeling the strain. With all of that in mind, let’s take a closer look at seven of the biggest supply chain pain points businesses are facing today, as well as how an automated software solution can assist with supply chain optimization.

01

Shortages of raw materials

The Problem 

Maybe the most fundamental supply chain issue facing businesses right now is a sheer lack of the raw materials necessary to start the manufacturing process. Materials that are usually abundant, such as plastic, glass and paper, fell into short supply during the pandemic and have yet to rebound fully.

Without regular access to those raw materials, orders get delayed and backlogs quickly become unmanageable. After all, there isn’t much a business can do about fulfilling an order on time if the plastic needed to start the process is stuck in a shipping container on the other side of the country.

The Solution:
Proactive inventory management

Automating your supply chain management process won’t make those raw materials any easier to procure, but it can help you to make the shortages less painful. For example, using software tools for proactive inventory management provides your team with real time information on what inventory is on hand at any given time, where those materials are physically located, and where they need to be by when in order to keep ahead of demand. When shortages arise, that proactive approach and deeper visibility allows you to look for alternate resources, or at least to give your customers ample notice that their orders may be delayed.

02

Difficulty collaborating with foreign markets

The Problem 

Even when raw materials are available, it can be a challenge getting access to them due to the volatile state of international trade. With the U.S. locked in unofficial trade wars with some of the world’s largest suppliers and unpredictable world events shaking up previously stable relationships, navigating foreign trade has become a serious issue for nearly every organization with overseas interests.

Factors like China’s zero COVID policy or international sanctions in the face of Russia’s invasion of Ukraine are not things that any business could have reasonably predicted, but they are things that those businesses need to account for in their supply chain strategy. Even through challenging economic times, a global economy makes strong relationships with foreign markets a necessity for every business.

The Solution:
Automating inventory data

While automating your operations unfortunately won’t have any impact on global supply chain issues, there are some areas where it can have a significant effect on how you deal with those problems. An automated solution provides deeper, real time supply chain visibility that allows you to take inventory of what stock you have on hand at any given time.

That insight makes it easier to adjust production and ordering schedules so you can make the most of the stock you have. That data can also make it easier to identify opportunities for reshoring, or finding local providers who can provide materials and fill needs that have previously depended on foreign suppliers. Reshoring can mean paying higher prices in the short term, but in many cases that premium is worth it if it helps close supply chain gaps.

03

Rising delivery costs

The Problem 

Supply chain problems have been in the news for several years now, to the point that they may start to feel like an abstraction, or just the new normal way of doing business. In fact, the continued spiraling of delivery costs remains a major obstacle for nearly any organization that relies on the transport of goods and materials.

For example, between 2020 and 2021, the cost of delivering a single shipping container from China to Europe skyrocketed from around $1,900 to $14,000. That’s an increase of around 600%, and an illustration of how pressing an issue this is for any business with a limited shipping budget. Unfortunately, bringing down those costs is out of the hands of the organizations most impacted by them. The best recourse for most companies is to reduce costs elsewhere, often via large-scale automation like investing in robotics or automated storage facilities.

The Solution:
Automating invoice and order processing

Automating your AP system can also play a smaller but still impactful role by significantly reducing the time it takes to process invoices and purchase orders.

That cuts down the risk of human error that comes with handling those processes manually, allowing your orders to process as swiftly as the current supply chain allows.

04

Lack of visibility

The Problem 

Addressing supply chain issues becomes all the more difficult if you don’t know where exactly they originate. Tracking the shipping process from the point of purchase through the point of delivery involves multiple departments, each of which might have its own internal processes and practices. Trying to coordinate all of those varying vantage points while keeping orders flowing in a timely fashion can quickly become a confusing mess without enough visibility into where each order stands in the process.

Worse, when bottlenecks and supply chain interruptions do come up, that lack of visibility makes it much harder to pinpoint the causes and make the changes needed to prevent similar issues in the future. The time your team spends tracking down issues manually only adds to the lost time, creating additional slowdowns and potentially making the problem worse.

The Solution:
Creating digital visibility

Automation-assisted customer communication
The insights your business acquires from an automated supply chain management system can provide more visibility into your process not only for you, but for your customers as well. Using your supply chain management tools alongside your customer communication management system, you can turn a potential disadvantage into an advantage by being as upfront as possible with your customers. 

Sending personalized notifications about delays, out-of-stock materials, and other frequent supply chain issues may not get the goods in their hands any quicker, but it can go a long way toward making customers feel seen and supported. That’s the kind of connection your customers will remember the next time they place an order.

05

Tense customer relationships

The Problem 

Even if your customers understand that supply chain issues are out of your control, that doesn’t mean that they need their orders fulfilled any less urgently. Nearly 90% of American consumers said they were negatively affected by supply chain issues in 2021, and more than half say they want more transparency about those problems from businesses.

In a culture that’s conditioned us to expect near-immediate service and always-available goods and products, accepting a more limited reality can be a real challenge. That challenge becomes even more consequential for businesses if there’s a perception that your competitors are better at navigating the supply chain, or even simply more transparent about those difficulties.

The Solution:
Automation-assisted customer communication

The insights your business acquires from an automated supply chain management system can provide more visibility into your process not only for you, but for your customers as well. Using your supply chain management tools alongside your customer communication management system, you can turn a potential disadvantage into an advantage by being as upfront as possible with your customers.

Sending personalized notifications about delays, out-of-stock materials, and other frequent supply chain issues may not get the goods in their hands any quicker, but it can go a long way toward making customers feel seen and supported. That’s the kind of connection your customers will remember the next time they place an order.

06

Out-of-stock items

The Problem 

Goods and materials falling temporarily out of stock are among the biggest frustrations of the current era of supply chain management. Not having enough products available to fulfill orders due to delivery delays is obviously a major headache in itself, but the full scope of the situation is even more distressing.

With disruptions along virtually every point in the supply chain, those delays are often caused by parts and materials being unavailable early in the manufacturing process. That type of delay can throw off the entire workflow. Materials that are available need to be stored until the missing parts can be procured, which can drive up inventory costs and require adjustments to your contracts with those suppliers. Meanwhile, customers need to be informed that their items are temporarily out of stock and given a time frame for their availability.

The Solution:
Increased order processing visibility

There aren’t many bad order processing situations that can’t be made worse by trying to deal with them manually. Automated supply chain management tools allow your team to not only process large volumes of invoices and purchase orders more efficiently, but also to make modifications and adjustments at any point in the process. That can save a great deal of time and money when unexpected delays throw you off your usual rhythm.

07

More complicated supply chain processes

The Problem 

All of the frustrations and challenges that come with these disruptions in the expected supply chain process have an obvious impact on your customers, but they also take their toll on your workforce. Supply chain employees have been stretched thin over the past several years as they try to process large volumes of constantly changing data and adapt to a wide range of temporary and permanent changes in the process.

That kind of unpredictable environment poses several risks for an organization, especially one relying on a fully or partially manual process. These changes in workflow often necessitate more human touch points, which in turn raises the chance for human errors which then take time to correct. Even worse, this creates a more stressful environment for supply chain employees. That can lead to burnout and higher rates of turnover, making the process hugely expensive and inefficient for an employer.

The Solution: Automating tedious tasks

Eliminating human errors and removing the most repetitive and frustrating aspects of process management are among the biggest selling points for automation. While automated solutions can’t change the realities of the current state of the international supply chain, they can make it considerably easier on your employees by facilitating error-free document distribution, sending out notifications when invoices are due, helping you qualify for early payment discounts, and allowing your team to focus on tasks that keep employees engaged and satisfied. That means a happier workforce and increased productivity across the board.

Solve Your Supply Chain Pain Points with MHC!

The hard truth of the current supply chain situation is that these problems are not going away any time soon, and some elements of the global supply chain may be permanently altered. For the time being, the best approach for most organizations is to adapt to the current reality. That entails adopting new technologies and processes that make the best of a challenging situation, and automating your supply chain process is at the heart of that effort.

MHC offers a range of supply chain solutions that can provide better visibility, improved accuracy, lower costs, faster reconciliation, and a number of other benefits that keep your customers happy and your inventory moving as smoothly as possible. Contact us today to schedule a demonstration of how our industry-leading automation solutions can make your supply chain pain points less painful.

WHITEPAPER

Get to Know MHC!

Automate Processes.
Empower People. Reach Your Goals.

From document capture and content creation to employee self-service and other critical use cases across the enterprise, you can combine and configure MHC’s automation solutions to empower teams to meet goals today – and for the long game.

Download our guide and find out how MHC Automation can help you improve service, manage compliance, and drive ROI.

JOIN OUR NEWSLETTER

Stay in the know!

Sign up and have our newsletter delivered right to your inbox. Stay up to date on everything happening in the AP and CCM worlds!

View Our Latest Posts

Top US Corporate Payment Trends Shaping 2022 and Informing 2023

Having hosted some of the brightest minds in accounts payable, we have been able to get a grasp on the most informative trends we’re seeing in US corporate payments in 2022. And as we’re always looking to the future, we’re eager to discuss the payment trends we believe will have the biggest impact on AP teams in 2023. (…)

Read More »

paperless accounts payable

How to Make Accounts Payable Paperless

As accounts payable departments move to more, the idea of a paperless AP system has become more and more appealing to many organizations. Discover the 10 benefits of making your AP department paperless! (…)

Read More »

Automated Invoice Approval Workflows Web Banner

Automated Invoice Approval Workflows

Let’s take a closer look at how an automated invoice approval workflow works, the main steps it includes, and the benefits you reap with automation. Then let’s go through the risks you’re looking at if you stick with manual approval. Find out more! (…)

Read More »

       RESOURCES
       Explore our resource galleries

1. Request a personalized demo.

2. Download one of our whitepapers.

3. Share this article on social media.

Facebook
Twitter
LinkedIn
Scroll to Top

NOVEMBER 29  |  12-1 PM CT  |  WATCH RECORDING

Speaker – Kyle Hartung, MHC Customer Success Account Executive

Sign up and have our newsletter delivered right to your inbox. Stay up to date on everything happening in the AP and CCM worlds!

This website uses cookies to ensure you get the best experience on our website. By continuing to browse on this website, you accept the use of cookies for the above purposes.