Top 5 Supply Chain Challenges in 2020

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The year 2020 might have started well but, soon things were out of control. The deadly virus created havoc enforcing mass closure of retail shops, offices, and institutions worldwide. Since then, everything has changed. While the corporate sector has resorted to the work from home culture, other business organizations are grappling to keep up with the crisis while serving their customers uninterruptedly.

Irrespective of what the type of business is, it is the supply chain and the logistics that connect the manufacturers to the end consumers. Whether you are a retailer or a manufacturer, you must evolve to meet ever-changing needs to meet the global supply chain challenges. Several factors affect or say influence the logistics industry which then exposes the same to a series of challenges.

Keeping this as the core of our discussion, we now the top challenges the supply chain industry is experiencing in the given times.

Top Supply Chain Challenges 2020

  • Lack of Transparency

The term transparency suggests that there is total traceability of products from the shipment to the delivery. Put simply, it requires the organization to have total knowledge about the supply chain. Also, the organization must be capable of transferring this information both within and outside their workspace.

The sole reason why transparency has garnered much attention is because of the customers. Research by MIT Sloan School of Management reveals that consumers are willing to pay more for a product if the company provides supply chain transparency. Hence, it is important to attune your operations and embed measures to turn your supply chain transparent.

  • Poor Digital Transformation

Digital transformation is the need of the hour. Despite being a sector that operates manually, the supply chain industry needs to reconsider integrating technologies and corresponding solutions to accelerate the day to day operation, boosting productivity. Digitizing supply chain activities gives leaders the ease to connect with their customers on a personal level, understand their preferences, and act accordingly.

A survey by APQC reveals that 83% of the supply chain industry is on the path of transformation. Yet the pace at which the changes are being manifested is slow opening sheer lack of consistency. Sticking to the traditional paper and pen model reduces efficiency and is high on the pockets. Given the COVID-19 crisis, the need for digital transformation has risen and the industry needs to change at the earliest.

  • Replacing the Traditional Inventory Strategies

For long, the supply chain industry has used the traditional way of strategizing inventory. According to this, the past performances were taken into consideration to draft a new strategy. While this method has worked in the past, it isn\’t the best way to operate in 2020. The major problem here is that such a method is not realistic. Meaning that it does not consider unexpected events.

What\’s needed is an outside-in approach where data is continuously monitored and analyzed to make decisions. The supply chain optimization is a huge challenge as industries are just lagging in digital transformation.  Handling unpredictable situations is a must in given times and that\’s why they need for warding off the traditional method seems necessary.

  • Omni-channel Presence

A common phrase used across all industries today, omni-channel presence. Though this might not seem meaningful it is. Consumers today purchase goods from multiple channels and different markets. As the number of channels increases, the need to be present on each of them also increases.

Addressing the challenges of each of these platforms and fixing them is a tough task. Where the eCommerce website users seek last-mile delivery, traditional retailers expect the supply chain industry to have last storage locations in proximity to the metropolitan areas for quick availability. To survive the battle of being the best, supply chain managers must adopt flexibility in operations. The entire system should work fast but in tandem with the market requirements.

  • Insufficient Data

Considering the fact that data today holds immense potential, the inability to gather, analyze, and study them is one of the biggest supply chain challenges. Customer demands are anything but dynamic. To meet their evolving expectations, the supply chain industry needs to revisit its infrastructure and deploy cloud-native applications that can store and extract data.

Even though organizations are leveraging the traditional ERP software, but it isn\’t capable of managing huge chunks of data. What\’s needed here is a smarter and tech-driven system that can not just analyze but at the same time offer relevant insights based on the given data. This will help them make data-based decisions faster and better. The world today functions one step ahead of the present. A prescriptive analysis is no longer news and it\’s time that the supply chain industry too adopted the solution to build a stronger model. 


It is pretty much clear that the supply chain sector is grappling to sustain the problems and survive. In order to turn your supply chain robust and future proof, it is important that you realign your strategies and work towards improving the supply chain system. In uncertain times such as these, vulnerabilities have risen and the only way to deal with it is to move along with the change. Assess your existing infrastructure, start correcting mistakes, closing gaps, and strong-arming your channel to deal with the new normal.

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