Internal Supply Chain Threats

Greetings I’m Suriya Kumar, Pursuing MBA at Amrita School of Business. This blog is about my learnings in internal supply chain activities.

Internal supply chain of activities within a company includes purchasing, production, sales and distribution. Internal supply chain ensures the smooth operations and harmonized workspace. The internal supply chain is responsible to determine where the product should go from the raw material to its final quality control processes. The optimization of the internal supply chain helps ensure on-time production, improved ability to effectively deal with unforeseen circumstances.

Threats to the internal supply chain

• Fluctuating customer demand

A change in customer demand can deeply affect the internal supply chain; whether demand is increasing or decreasing, both have an impact on production. This is where the company should be able to face the demand with proper forecast and capacity cushion. So in spite of the demand fluctuations a firm should not lead to customer dissatisfaction as it has a huge impact on profits.

• Machine breakdowns

This halts manufacturing and wastes time, as well as money, due to a failure in production leading to unplanned downtime. This potential threat emphasizes the need for companies to be more aware of the condition of their machinery, which are connect to the integrated systems and whose operations are critical. Monitoring this helps manufacturing processes to become more visible and creating value.

• Change of technology

This can be seen as threatening to the internal supply chain, especially to employees, if they feel that new robots will replace them in specific tasks or they may need more training in handling these robotics, or if it is hard to come to terms with working alongside the new technology.

Yet, Digitalization is a trend that is consistently emerging throughout the entire supply chain. Even though technology can be a threat to the internal supply chain, it can also help to optimize operations, once imbedded into the culture of the company.