Supply chain management in 2015: Top tech, demand and cost challenges


In order to keep pace with today’s competitive global supply chains, companies must ensure they are utilizing current supply chain technologies to increase efficiency and keep up with customer demand.

In addition, today there is an array of issues and considerations that supply chain supervisors must keep in mind, including the following:

1) The Internet of Things

The IoT seems to be disrupting processes in nearly every industry these days, including enterprise supply chain management. Material Handling & Logistics contributor Luis Humberto Eraña reported that Gartner research predicts that the IoT will have a considerable impact on supply chains, especially when it comes to dealing with current challenges. The growing number of connected systems and sensors that make up the IoT - poised to reach 26 billion units by 2020 - will likely provide new opportunities for supply chain management.

"As devices become more self-aware and communicate with their ecosystems, for example, they will be able to describe their own availability, capacity and health - as well as that of the products and materials with which they are interacting," Eraña wrote. "Companies can apply this technology, Gartner concludes, to solve or mitigate supply chain challenges."

2) Changes in demand

According to Global Purchasing contributor Mark Bollinger, a recent study showed that the vast majority of respondents in a number of different sectors listed demand changes as their top concern. Overall, 72 percent of respondents noted this to be true, including original equipment manufacturers, electronics manufacturing services providers, contract manufacturers and original design manufacturers.

While changing demands are inherent to the marketplace, they can create significant issues for supply chain management, particularly when it comes to planning ahead. For example, if a company stocks up on a product in response to a forecasted uptick in demand, but client needs shift away from this item, the business has a number of issues to deal with. Not only do supervisors have to figure out what to do with the surplus, they must also shore up their inventory to make sure they have other items consumers are looking for.


The Internet of Things (IoT), changing market demands and pressure to reduced operating costs can create challenges for supply chain management in 2015.

3) Pressure to reduce operating costs

McKinsey & Company also found that the majority of firms are concerned about keeping operating expenses down. According to a recent survey, 61 percent of respondents have held a goal of reducing operating expenses over the past three years. What's more is that researchers found that this focus will continue in the future, as reducing operating expenses was the top-selected goal over the next five years as well. Although there has been some improvement, keeping an eye on operating costs is still highly important.

"Of course, executives are not ignoring supply chain costs altogether; after weathering a downturn, they know their companies can manage and control future expenses, now that the issue has been on their radar consistently," McKinsey & Company noted.

As this has remained a top priority for many companies, it illustrates the need for new solutions that can help organizations keep better track of their overall supply chain expenses in order to find the best places to cut costs.

A system that can assist managers in these regards is the IBM Sterling Commerce suite, which can provide improved oversight of omni-channel commerce, order management, warehouse management,and supply chain visibility. 

Overall, administrators must ensure that they consider any emerging technologies in need of support, as well as shifts in market conditions. Taking these important factors into account can help guarantee success and proper supply chain management.  

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