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The Challenges of SCM and How to Overcome Them in 2025

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Imagine this: A manufacturer eagerly awaits a shipment of critical components needed to complete a major order. But suddenly, a factory strike on the other side of the world halts production. At the same time, a hurricane shuts down a key shipping port, and a surprise spike in consumer demand leaves shelves empty faster than expected. These disruptions create a ripple effect, impacting not just one company but entire supply chains.

Effective supply chain management (SCM) is the invisible thread that ties these operations together, ensuring goods, services, and information flow seamlessly from suppliers to customers. It’s what keeps products arriving on time, costs under control, and customers satisfied. But as supply chains expand across borders and become more interconnected, managing them is like navigating a labyrinth full of challenges: geopolitical conflicts, natural disasters, shifting consumer expectations, and increasing pressure for sustainable practices.

To keep things running smoothly, businesses need more than just reactive fixes, they need to anticipate disruptions before they happen. Supply chain management isn’t just about understanding obstacles; it’s about predicting the unpredictable, thinking multiple moves ahead to stay resilient in an ever-changing landscape.

Common Challenges in Supply Chain Management

Navigating modern supply chains is no small feat. From unexpected global disruptions to ongoing visibility issues, supply chain teams face numerous challenges that can derail even the most carefully planned operations. While the obstacles are many, these are some of the most critical hurdles to keep on your radar. 

Graphic overview of an entire supply chain, illustrating the interconnected challenges of SCM from suppliers to customers.

Global Supply Chain Disruptions

Disruptions can strike at any time, creating chaos across supply chains. Geopolitical tensions, natural disasters, and pandemics are among the biggest threats. Trade wars, sanctions, and regional conflicts can also restrict access to essential suppliers and raw materials. 

But not all disruptions come from external shocks — sometimes, they’re triggered from within. When supply chain leaders anticipate shortages, they often place additional orders or build up safety stocks, triggering a ripple effect where others follow suit. This demand surge creates artificial scarcity, straining suppliers, inflating costs, and ultimately leading to widespread chaos across the supply chain.

Between 2020 and 2024, the , reflecting growing volatility in global trade. Leveraging 3rd party like 91ÉçÇø’s provides companies with timely insights into geopolitical risks, supplier vulnerabilities, and commodity fluctuations, helping you anticipate disruptions before they escalate.

Supply Chain Visibility

Limited supply chain visibility remains a critical pain point, with only . Without end-to-end visibility, businesses struggle with delayed shipments, unexpected stockouts, and operational inefficiencies—issues that can quickly escalate into lost revenue and damaged customer relationships.

Disconnected systems, siloed data, and fragmented communication with suppliers only add to the challenge. Investing in cloud-based platforms, IoT sensors, and AI-powered analytics can help organizations integrate data from multiple sources, enabling real-time tracking, predictive insights, and faster decision-making.

By improving visibility, companies can proactively address bottlenecks, optimize their inventory management, and increase supply chain agility. Partnering with a like 91ÉçÇø can help implement tailored visibility solutions, ensuring a seamless, data-driven approach to logistics.

Demand Forecasting & Inventory Management

Accurately predicting customer demand is one of the toughest challenges in supply chain management. Without a strategic approach, businesses risk two major pitfalls:

  • Overstocking, which ties up capital, increases storage costs, and can lead to product obsolescence.
  • Understocking, which results in lost sales, disappointed customers, and potential damage to brand reputation.

Traditional forecasting models often fall short due to shifting consumer behavior, supply chain disruptions, and economic fluctuations. To stay ahead, leading organizations are enhancing their Sales & Operations Planning (S&OP) cycles with AI-driven demand sensing and predictive analytics. These technologies improve forecast accuracy, optimize working capital, and enable supply chain agility.
 
By leveraging machine learning and advanced analytics, companies can refine demand planning, anticipate fluctuations, and make more responsive, data-driven decisions. Effective forecasting relies on collaboration and adaptability to enhance accuracy and agility. With real-time insights and predictive models, businesses can minimize waste, optimize inventory, and turn demand planning into a strategic advantage.

With , staying competitive will require more than just incremental improvements. Success will belong to those who turn uncertainty into opportunity by making forecasting a true competitive advantage.

Supplier Relationship Management

Strong supplier relationships are the backbone of a smooth-running supply chain. When those relationships falter, delays, quality issues, and unexpected costs can quickly follow. Given that , these partnerships are too valuable to leave to chance.

The key to success? Trust and open communication. Regularly checking in with suppliers, sharing expectations, and giving constructive feedback can help avoid surprises. 91ÉçÇø’s team of helps companies develop supplier relationship management programs based on 50+ years of experience.

Transportation & Logistics

Managing transportation and logistics comes with an array of unpredictable challenges that can significantly impact supply chain efficiency. Volatile fuel prices can spike operating costs, carrier capacity constraints lead to delayed shipments, and security risks, including cargo theft and cyberattacks, can disrupt operations.
 
Geopolitical tensions and climate shifts are making logistics even more unpredictable. Rerouted shipments, trade restrictions, and fluctuating water levels in critical transit routes are causing delays and driving up costs. In 2024, due to disruptions in key maritime routes such as the Red Sea, Suez Canal, and Panama Canal, driving freight rates more than double their late 2023 levels. Despite recent declines, shipping costs remain highly volatile, putting ongoing financial pressure on supply chains. To stay ahead, companies are diversifying carriers, tracking shipments in real time, and using AI-driven route optimization to keep deliveries on schedule and costs under control.

Sustainability and Ethical Sourcing

Sustainability and ethical practices are no longer optional in modern supply chains. With , the pressure is on for businesses to align their practices with consumer expectations.

By partnering with suppliers who prioritize sustainability, conducting regular audits, and optimizing logistics to cut emissions, organizations can meet these demands. These efforts don’t just benefit the planet; they build brand loyalty, enhance resilience, and keep companies ahead in an increasingly conscious market.

Strategies to Overcome Supply Chain Challenges

While supply chain challenges are inevitable, they don't have to derail your operations. By adopting the right strategies, companies can build resilience, enhance efficiency, and stay ahead of disruptions. With , businesses can proactively address these challenges by outsourcing critical supply chain functions, leveraging expert insights, and implementing data-driven solutions.

Here are some proven approaches to help you navigate these challenges and keep your supply chain running smoothly:

Business team in a meeting discussing strategies to overcome the challenges of SCM and improve supply chain efficiency.

Improving Supply Chain Visibility

Imagine having a clear window into every step of your supply chain — knowing exactly where your goods are, when they’ll arrive, and if there are potential hiccups along the way. Centralized platforms that pull data from suppliers, warehouses, and logistics partners offer a complete picture of your operations. This means no more scrambling to locate shipments or wondering where delays are coming from. With real-time insights at your fingertips, you can quickly adjust routes, manage inventory more effectively, and stay ahead of disruptions. 

Advanced Demand Planning

From Economics 101 to high-stakes C-suite discussions, figuring out where supply meets demand has always been a challenge. No matter how complex your supply chain is, accurate demand planning is the key to avoiding those dreaded stockouts or mountains of excess inventory.

Thankfully, AI and machine learning are here to help. These tools dig into historical data, market trends, and real-time insights to produce smarter, more accurate forecasts. When businesses combine advanced technology with genuine collaboration, they can strike that perfect balance: optimizing inventory, reducing costly surprises, and keeping customers happy. 

Building Strong Contingency Plans 

Supply chain disruptions can strike unexpectedly, and recent data proves it. According to a 2024 study, 80% of organizations faced supply chain disruptions in the past year, with most experiencing between one and ten disruptions.

A proactive risk management approach is essential. Companies should develop "what-if" scenarios, conduct stress tests, and establish crisis response teams to handle supply chain shocks effectively. Flexible contracts with alternative sourcing options can provide backup when disruptions occur, allowing businesses to pivot quickly and maintain operations.

Optimizing Inventory Management

Getting inventory right is a balancing act. Too much stock ties up working capital, increases storage costs, and impacts Free Cash Flow and Weighted Average Cost of Capital (WACC). Too little leads to stockouts, missed sales, and strained supplier relationships. For years, Just-In-Time (JIT) inventory was the go-to strategy for efficiency. But as many automakers learned in , it can also mean Just Inviting Trouble when disruptions hit. That’s when Just-In-Case (JIC) inventory comes into play, keeping a little extra stock on hand to cover those unexpected bumps in the road.

Graphic comparing Just-In-Case (JIC) and Just-In-Time (JIT) inventory management strategies to navigate the challenges of SCM and optimize inventory control.

91ÉçÇø’s Supply Chain Consulting team offers businesses the insights needed to refine their inventory strategies, ensuring the right balance between Just-In-Time (JIT) and Just-In-Case (JIC) inventory models. 

Strengthening Supplier Relationships

Strong supplier relationships are the backbone of a resilient supply chain. When trust and transparency are in place, collaboration becomes second nature. Suppliers and businesses can work together to drive innovations, streamline processes, and cut costs. 

However, relying too heavily on a single supplier poses risks. In fact, up plan to reconfigure their supply chains in 2025, with diversification and localization as their top priorities. 

Regularly evaluating supplier performance helps ensure they meet quality standards and delivery timelines. By fostering these strong relationships, businesses can stay flexible, reduce disruptions, and keep their supply chains running smoothly.

Leveraging Technology

Technology plays a crucial role in tackling modern supply chain challenges. Supply chain planning software optimizes procurement and logistics, while warehouse management systems improve storage and distribution efficiency. Transportation management systems enhance shipping routes and reduce costs. In addition to adopting these tools, are committed to training and upskilling their workforce to effectively use new digital technologies.

By combining advanced tools with a skilled team, businesses can boost efficiency, improve accuracy, and build resilience across their supply chains. This proactive approach helps companies stay agile and competitive, even when disruptions arise.

Supply Chain Management: Ready for Whatever Comes Next

Supply chain challenges are a given, but they don’t have to throw your business off course. By recognizing these obstacles and taking proactive steps, you can create a supply chain that’s both resilient and efficient.

Investing in modern tools, skilled teams, and strategic partnerships today means you’ll be ready for whatever tomorrow brings. help businesses streamline operations, mitigate risks, and optimize supply chain performance – all with the mindset of practitioners with 50+ years of experience. The key to effective supply chain management? Staying agile, prepared, and always one step ahead of the next disruption.