Prior to the pandemic, there were several challenges across the supply chain network that businesses had to deal with. Some of the major challenges were:
- Globalization: As supply chains become increasingly globalized, businesses faced challenges related to managing a network of suppliers and vendors across different countries and time zones. This often involved navigating complex trade regulations, customs, and tariffs.
- Cost control: The pressure to keep costs low while maintaining high levels of quality was a constant challenge for businesses. This required careful planning and optimization of all aspects of the supply chain, including procurement, logistics, and inventory management.
- Demand volatility: Fluctuations in demand due to changing consumer preferences, economic conditions, or other factors could cause disruptions in the supply chain. Companies had to be agile and responsive to these changes in order to avoid stockouts or overstocking.
- Supplier risk: Dependence on a small number of key suppliers or vendors could create a risk of supply chain disruption if one of them encountered a problem. This risk was compounded by the fact that many suppliers themselves had complex supply chains that could be impacted by various factors.
- Information visibility: Lack of visibility into the entire supply chain network could make it difficult for businesses to respond to changes or disruptions. This required better collaboration and communication across the entire network.
Overall, businesses had to balance the competing demands of cost control, risk management, and customer service while navigating the complexities of the global supply chain network.