To maximize revenues and eliminate the negative impact on profits, forward-thinking supply chain leaders are digitizing their supply chain issue management and using process improvement methodologies to greatly improve their supply chain performance.
Common supply chain issues like shipping delays, material shortages, manufacturing problems, and quality issues all have the potential to become major supply chain disruptions that negatively impact revenue. As these disruptions are only expected to become more frequent, strategically-minded supply chain leaders are trying to determine how they can minimize the impact of supply chain disruptions to maximize their revenues.
The cost of supply chain disruptions
In their report “The Business Costs of Supply Chain Disruption,” The Economist Intelligence Unit determined that supply chain disruptions cost businesses an average of 6-10% of annual revenues. This survey of senior supply chain and procurement executives also revealed that firms often reported damage to brand reputation as a major consequence of supply chain disruptions. As a result, more than half of the executives surveyed (54%) are making significant changes in order to more effectively manage supply chain disruptions.
Minimize the impact of supply chain disruptions with multienterprise applications
Many companies are still relying on ad hoc processes based on phone calls, emails, and meetings to resolve their most critical supply chain issues. To maximize revenues and eliminate the negative impact on profits, forward-thinking supply chain leaders are digitizing their supply chain issue management and using process improvement methodologies to greatly improve their supply chain performance.
Companies that have used Agile Process Teams for Supply Chain Issue Management (APT-SCIM) to digitalize the reporting, root cause analysis, and resolution processes for supply chain issues that occur across the end-to-end supply chain have achieved a 65% reduction in time to resolve supply chain issues and a 35% reduction in the total number of supply chain issues. Reducing supply chain issue resolution times and total count of open supply chain issues allows companies to minimize the impact of supply chain disruptions on brand reputation and maximize their revenues.