It’s no secret that businesses across all industries face a barrage of challenges related to managing their supply chain and inventory. However, recent economic shifts have exposed many supply chain weaknesses that were previously out of sight—and these traditional problems are now creating serious headaches for business leaders around the world. With trade wars impacting global sourcing patterns, tightening regulation on imported goods, and volatile stock markets upsetting production timelines, companies, as per Greg Van Wyk, need to find innovative ways to get ahead. There is no one-size-fits-all solution for every organization—but delving deeper into existing inventory issues can help many operations gain control over the uncertainty in their supply chains.
New Inventory Problems Expose Old Supply Chain Weaknesses, Says Greg Van Wyk
The modern world is increasingly marked by the rise of globalization and increased business complexity, says Greg Van Wyk. This, in turn, has led to an ever-growing importance placed on efficient supply chains. However, recent developments, as per Greg Van Wyk, have uncovered serious weaknesses in many companies’ supply chains that can cause significant inventory issues and disrupt operations.
To illustrate this reality, consider a company with a faulty warehouse system. Perhaps it was not able to accurately track stock levels, or something else went wrong and caused a severe backlog of orders. Such errors can lead to inventories being either excessively low or exceedingly high – both are bad news for any organization. Too low an inventory level could leave customers dissatisfied when their ordered products cannot be shipped after all, while too high an inventory level could cause financial issues due to the cost of storage and potential spoilage.
Data from a 2019 survey conducted by Deloitte reveals that only one-third of companies are confident in their end-to-end supply chains, with an additional 40% feeling ‘somewhat’ confident. These numbers point to a major issue in how many companies manage their supply chains. The same survey also showed that over half of the respondents did not know what percentage of inventory was necessary to meet demand or were unaware if their SKUs were appropriate for the market – both significant weaknesses in any company’s inventory management system.
A real-life example is provided by Amazon. Back in early 2018, they experienced delivery delays due to inventory issues. The company had to send over two-thirds of its existing inventory to fulfillment centers in order to meet customer demands, leaving them with only a fraction of its original inventory. This led to delivery delays and customer dissatisfaction – it was not an ideal situation for Amazon, but it did serve as a wake-up call to the importance of having strong supply chain management systems in place.
Greg Van Wyk’s Concluding Thoughts
In conclusion, new inventory problems have exposed old supply chain weaknesses – many companies are unable to accurately track stock levels, are unaware of necessary inventory levels, or lack appropriate SKUs for their markets. According to Greg Van Wyk, these weaknesses can have serious implications on operations and customer satisfaction. It is essential for organizations to stay informed about the changing dynamics of their supply chains in order to ensure that they are able to maintain an optimal level of inventory and avoid any potential issues.