Friday, November 19, 2010

10 Common Issues with the Supply Chain.

10 Common Issues with the Supply Chain.

1.     Borrowing money:
Sale and inventory information are a major factor when getting financed. Not having the proper information will result in the main lender declining the loan or line of credit. Borrowing the money in secondary financial markets will result in high interest and increase operating costs.

2.     Cash flow issues:
Not having the right collection tools, the Account Receivable invoices become overdue, resulting in cash flow problems and financing at high interest rates.

3.     Buying based on "guesswork":
Not having accurate computer information will result in purchasing the wrong products or quantities and the unsold inventory will "collect dust" on the shelves in the warehouse.

4.     Purchase order verifications:
When inventory is received at the warehouse, not being able to scan and verify it against the purchase order will result in excessive paper work, higher labor cost, and possibly missing the early payment discount date offered by the vendor.

5.     Misplaced inventory:
When consolidating items on shelves, inventory often gets misplaced resulting in unnecessary replenishments. At physical inventory time, when found, this "lost" inventory often becomes excess inventory that might not be sold.

6.     Wrong shipments:
When incorrect products or quantities are shipped it creates the "domino effect" of business disruptions. Returned products carry double freight bills and the invoices will not be paid until credits and adjustments are issued. If the shipped inventory is replenished, often it will become excess inventory.

7.     Production coming to a grinding halt:
Not having accurate inventory control will result in parts' shortages that can bring the assembly line to a grinding halt, resulting in business disruptions.

8.     Profit or loss when using the Web?"
The Web can be a key to sales' success or business disruptions. Using the Web can increase sales drastically, or result in disruption of the back office business flow. Having outdated software will result in incorrect shipments, shortage of saleable items or excess inventory.

9.     Inaccurate sales information:
An outdated computer system will produce inaccurate information affecting future business planning and buying patterns.

10.  Disaster recovery:
If a disaster occurs, not being able to provide accurate computer information to the insurance company will result in devastating losses.

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