Introduction
A supply chain is a complete system that involves producing and delivering goods and services, starting from the initial stages of getting the raw materials from their sources to the final phases of providing the goods and services to the consumers. Factually, the supply chain encompasses all the aspects involved in production. The activities carried out at each stage of the supply chain, the transformation of natural resources into finished products, the information conveyed at each level, and all other mechanisms contributing to the finished service or goods (Raza, 2018). A supply chain constitutes a network of various parameters embedded in its structure. Such parameters include the organizations, activities, individuals, technology, and resources applied to create and sell a good or service (Peng and Zhou, 2019). Therefore, it is prudent to indicate that many challenges arise in various stages of the supply chain due to the introduction of new models. This essay focuses on challenges that the supply chain may face in the future.
This essay focuses on the challenges facing the four topics of discussion vital to a supply chain effective performance and success. Greening the supply chain is likely to meet future challenges, including changes in firm profitability, the search for new markets, and disputes in attaining strategic objectives. The reverse channel is expected to experience challenges in the future (Peng and Zhou, 2019). They include difficulties in value assertion of used products, development of an effective repair system, challenges in keeping track of warranty status, and the dilemma of managing contractors and dealers. Benchmarking is likely to experience difficulties finding benchmarking partners, over-reliance on quantitative data, challenges in obtaining useful information, and lack of formal benchmarking models. The future challenges likely to face the use of QR, ECR, lean and agile, and supply chain process control are discussed in detail.
The Greening of the Supply Chain
The sustainability of a supply chain is crucial in environmental conservation. Greening the supply chain also involves modifying the production and distribution of goods and services globally to ensure environmental protection at all costs (Stahl et al., 2020). The future challenges facing green supply chains include:
Changes in the Firm Profitability
The greening of the supply chain involves changing the customary business practices in the firm to achieve sustainability, which may lead to considerable shifts in the profit margin of the firm or business enterprise. The probable reduction in firm profits in attaining sustainability and environmentally friendly mechanisms is a risk most managers will not be willing to take.
The Search for New Markets
The introduction of green goods and services in the supply chain means that the firms or business enterprises have to do market research for their new products and locate probable consumers. Consumers will tend to be concerned about their personal needs rather than those of others when consuming environmentally friendly products (Wetzel and Hofmann, 2019). Statistically, individuals with less education are less likely to consume green products since they neither understand nor appreciate their sustainability.
Disputes in Attaining Strategic Objectives
Factually, every firm or business enterprise has its strategic objectives that ensure the company attains its goals. In the supply chain, there are various entities involved, and therefore it is a fact that there will be conflicts among them since each entity aims at achieving success in its way (Wetzel and Hofmann, 2019). The disputes that arise due to differences in strategic objectives are a significant hindrance in achieving green supply chains.
The Reverse Channel
A reverse channel is a series of activities involved in retrieving a used good or defective product from a consumer and reusing it or disposing of it. As discussed below, the process of a reverse channel in the supply chain is likely to experience future challenges.
Difficulties in Value Assertion of used Products
The value of goods returned to the firm through the reversal channel is more difficult to ascertain than goods in the case of forward logistics. It is difficult for a firm to ascertain the value of a used good when it has only a minor defect (Modak, Kazemi and Cárdenas-Barrón, 2019). This is due to the presence of a minor flaw in the product, the worth of the product can neither be the cost of the original product nor can it be zero.
Development of an Effective Repair Mechanism
The efficiency or success of a reverse channel is dependent on the use of a properly functioning product repair system. The firm must incur the cost of acquiring robust software that will enable product repair. The firm must train technicians on the proper use of the software. If the firm fails to acquire or develop powerful software, the repair process will be slowed down and eventually become cumbersome (GAO, Melero-Polo, and Sese, 2019).
Challenges in Keeping Track of the Warranty Status
Ideally, keeping track of the warranty status of a product is one of the most challenging and complex tasks that a firm must do during the reverse channel. Organizations experience various challenges in the process of tracking secondary warranties. Most of the difficulties arise when the return logistics software fails to track the secondary warranties and trace them back to the original equipment manufacturers (Olson et al., 2018). Such failures make the process of placing claims to be cumbersome.
The Dilemma Of Managing Contractors and Dealers
The reverse channel becomes complex due to the involvement of various stakeholders in the supply chain. The stakeholders include subcontractors, contractors, and dealers such as distributors. In almost all instances, the reverse logistics software cannot capture, identify, and track the movement of replacement parts back to contractors or dealers (GAO, Melero-Polo, and Sese, 2019). Such mishaps lead to serious confusion in the accounts and difficulties in checking the quality of goods and services.
Supply Chain Benchmarking
Supply chain benchmarking is the process of strategic comparison of various levels of sophistication in supply chains to identify specific levels that the firm or business enterprise deems vital to achieving significant performance levels that can ensure success. Supply chain benchmarking is likely to experience future challenges, as discussed below.
Difficulties in Finding Benchmarking Partners
When a firm or business enterprise wants to conduct a supply chain benchmark, it must identify another firm or other firms willing to participate in the benchmark. Different firms have different structures, sizes, and market conditions. Challenges arise when the company fails to find partners at all, finding partners with no excellent performance characteristics to be imitated or finding a company that is neither willing nor ready to share information regarding its exceptional performance strategies (Wetzel and Hofmann, 2019). Such problems make the supply benchmarking process to be cumbersome and tiresome.
Over-Reliance on Quantitative Data during Benchmarking
The supply chain benchmarking process mainly entails collecting quantitative data from the competing firms taking part in the process. Focus is given to the quantitative data rather than the processes responsible for producing the data. Additionally, companies can easily manipulate the quantitative data, therefore providing a wrong impression of the company’s actual performance (Wetzel and Hofmann, 2019). If the firm uses the collected data in designing business systems and strategic objectives, then there is a high probability of not achieving the set goal. Essentially, the supply chain benchmarking process becomes futile and non-profitable.
Challenges in Obtaining Useful Information in Benchmarking
The process of supply chain benchmarking entails obtaining information from other business entities. Some competitors may be adamant or uncooperative in giving helpful information about their performance since they deem such information “business secrets” (Cambra-Fierro, et al., 2017). Nonetheless, gathering information from other companies requires substantial effort, resources, and time, which can be channeled into achieving more profitable business objectives. Some intelligence activities, which include bribing competitors’ employees so that they leak information involving the company’s operation, could potentially lead to severe legal and ethical consequences.
Lack of Formal Benchmarking Models
The supply chain benchmarking methodology is based on informal setups with no clearly outlined rules, regulations, and terms of engagement. Factually, the supply chain benchmarking activities give a lot of information to a particular firm’s competitors. No company can be willing and ready to share information concerning its operations with its competitors. The consequence of such perception makes the supply chain benchmarking process unfruitful.
The use of QR, ECR, Lean and Agile, and Supply Chain Process Control
Use of QR in supply chain
QR is an acronym that stands for Quick Response code, and it is a barcode that stores large quantities of data as a series of pixels in a grid, shaped like a square, and whose information can be read quickly by the use of a digital device (Lawrence, Crecelius Scheer, and Patil, 2019). QR codes are vital tools for inventory management and manufacturing in supply chain management (Ballings, McCullough, and Bharadwaj, 2017). Firms use QR codes in tracking products in the supply chain enterprises.
Future challenges facing the use of QR codes
The most significant challenge facing the application of QR codes in inventory management is their small size. The small QR codes enable easy and proper scanning, but they store less data than more significant QR codes (Lawrence, Crecelius Scheer and Patil, 2019). If a firm wants to store more information, they need to use more extensive QR codes, which may cause a significant problem in tracking smaller assets. Factually, most firms or business enterprises have inventory management and product tracking systems that use standard barcodes (Ballings, McCullough, and Bharadwaj, 2017).. Removing the barcodes and replacing them with QR codes will lead to extra costs that the firm may not be ready to incur.
Use of ECR in Supply Chain
ECR is an acronym that stands for efficient consumer response, which is a business strategy used by firms or companies in ensuring the increased provision of services. ECR is met for consumers by optimizing cooperation among manufacturers, wholesalers, and retailers Liu et al., 2019). The main objective of efficient consumer response is to ensure the efficiency of the whole supply chain.
Future Challenges Facing the use of ECR on the Global Scale
The implementation of ECR is likely to face future challenges, which include ownership concerns that arise when the goods and services across different borders and come into various jurisdictions. Additionally, ECR faces the challenge of the division of profits which occurs when the benefits of a business deal cannot be easily quantified (Cambra-Fierro, GAO and Melero-Polo, 2021). Quantification of benefits is a significant problem for regions that are less technologically advanced. Nonetheless, there are copyright and privacy issues that arise when goods and services pass through different legal jurisdictions, which have different enforcements and protection of copyrights and privacy. Such challenges affect the efficiency of ECR in the supply chains.
Lean and Agile Supply Chains
A lean supply chain management is a strategy that involves reducing the cost of products or services and significantly lowering the amount of waste in the supply chain. An agile supply chain involves building a very flexible supply chain that can quickly adapt to the unpredictability of the market with speed.
Future Challenges Facing Lean and Agile Supply Chains
The agile supply chains face challenges that include monitoring of the transaction points by the firm and developing solutions to reduce the time taken while increasing responsiveness. Also, there exists the challenge of sequencing operations and utilizing assets. The firm must ensure that sequencing takes priority rules into account (Cambra-Fierro, GAO, and Melero-Polo, 2021). The lean supply chain is likely to experience problems such as the interconnected nature of activities, which may lead to some difficulties in developing and managing the lean supply chain.
Supply Chain Process Control
Supply chain process control can be defined as the firm’s ability to conduct close and careful monitoring of a process (taking into consideration the results produced). This is done in the supply chain while adjusting it effectively, to achieve a desired objective or output while also maintaining the quality and performance of the supply chain (Elia et al., 2020). Customer satisfaction is considered one of the most vital aspects of the supply chain (Elia et al., 2020). The firm has to ensure that the needs of customers are adequately satisfied. The company must ensure timely delivery of quality goods and services at the correct quantity to its customers, and this could be cumbersome along the supply chain.
Conclusion
In conclusion, the greening of the supply chain, the reverse channel, benchmarking, use of QR, ECR, lean and agile, and supply chain process control are vital aspects of the supply chain, but they face various challenges, as discussed above. Greening of the supply chain involves modifying the production and distribution of goods and services to ensure that environmental protection and conservation are achieved. Future challenges are likely to face greening of the supply chain, and they include changes in the firm profitability, the constant search for new markets, and disputes in attaining strategic objectives of various firms
The reverse channel constitutes activities involved in retrieving a used good or product from a consumer, reusing it, or disposing of the product. The future challenges likely to face the reverse channel include difficulties in value assertion of used goods or products, development of an effective repair mechanism, keeping track of the warranty status, and the dilemma of managing contractors and dealers. Supply chain benchmarking is the process of strategic comparison of various levels of sophistication in the supply chains. The future challenges likely to face supply chain benchmarking include difficulties in finding benchmarking partners, over-reliance on quantitative data, challenges in obtaining useful information, and lack of formal benchmarking models.
QR codes are essential for the large storage of a company’s data. The use of QR codes is likely to face future challenges, including their small size, which can be a disadvantage when a company wants to store an enormous amount of information. The implementation of ECR is likely to face ownership concerns, copyright, and privacy issues. Agile supply chains are likely to experience difficulties in monitoring the transaction points. The lean supply chain is likely to experience such as the interconnected nature of activities that may lead to problems in its development and management. The supply chain process control is likely to experience difficulties ensuring customer satisfaction. The firm must ensure that quality goods and services are delivered to its customers quickly. If the challenges are adequately solved, then the elements mentioned above will ensure the efficient performance of the supply chains.
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