Supply chain challenges: spotting risks, inefficiencies and opportunities to improve

Written by Marketing Team | Oct 5, 2026, 1:55:33 PM

Why supply chains matter in business

Supply chains are a lifeblood of business operations, but they've also gotten a lot more complicated in recent years. With modern networks stretching across the globe and consumers demanding more on top of shifting expectations, it's getting increasingly tough for businesses to keep up. The fact is, globalisation, shifting demand and changing customer expectations puts organisations under a lot of pressure, and makes some of the biggest challenges a business faces crystal clear.

The consequences of poor supply chain management

Supply chain challenges are the roadblocks and risks that can knock the efficiency and reliability of operations for six. That's across planning, sourcing, production, warehousing, transportation and delivery. For large and medium-sized enterprises in manufacturing, warehousing, retail, and distribution – especially those using SAP or planning an SAP S/4HANA switch – these issues can start to affect day-to-day performance in no time.

If you're not managing supply chains well:

  • Shipping gets delayed, leaving customers hanging

  • Increased costs see profit margins suffer

  • Inventory becomes a wild card, rather than something you can rely on

  • Delayed deliveries make it even harder to keep customers satisfied

This article is all about the most common supply chain challenges that businesses are facing, what causes them, how they affect operations, and the practical solutions that can be used to improve efficiency, visibility, and resilience. That's why understanding supply chain challenges is vital. By spotting common issues and their causes, businesses can start to do something about them – to improve performance and build more resilient, efficient supply chains. If you're reviewing your supply chain operations, the goal is simple: identify what's going wrong, understand the impact and implement solutions to get things back on track.

What do supply chain challenges really mean?

Supply chain challenges boil down to the obstacles and risks that impact the efficiency and reliability of supply chain operations – that's supply chain issues and major problems that undermine performance. And it's not just in one area - these challenges can disrupt operations right across the board.

When do supply chain challenges show up

These challenges can show up anywhere - that's across planning, sourcing, production, warehousing, transportation and delivery. In simple terms, supply chain challenges are problems that can disrupt operations by stopping the flow of goods and information across core supply chain processes.

Common supply chain challenges

Organisations face a whole range of common challenges.

Lack of visibility

  • Not having a clear view of inventory, orders and shipments – which is down to poor supply chain visibility

  • Not being able to track goods in real time – which is a problem when you don't have real time visibility and real time insights

  • Only 6% of businesses get full supply chain visibility

  • Improving visibility helps mitigate risks and build customer trust

Demand and supply mismatch

  • Forecasts are not matching actual customer demand

  • Leads to stock shortages or excess inventory

  • Using historical data and predictive analytics can help improve forecast accuracy

  • Advanced forecasting and AI can level out demand fluctuations, and AI-driven demand sensing improves forecast accuracy by a whole lot; 56% of companies are planning to invest more in predictive planning

Inventory management issues

  • Inaccurate stock data is often because of weak controls and missing warehouse audits, which can help identify discrepancies, streamline processes and support technology integration for better inventory management

  • Poor inventory control, especially in distribution centres where stock handling errors can happen

  • One related issue is that 11% of unit loads arrive at distribution centres damaged, which costs $260 billion per year and creates a major downstream inventory problem

Supplier reliability

  • Delays or inconsistent quality from suppliers

  • Being reliant on a limited number of suppliers makes it harder to find materials consistently

  • Building strong relationships with suppliers can make the supply base more reliable

  • These partnerships can also lead to discounts and priority deliveries. Loads of businesses are diversifying their supplier base, with 88% planning to do so by 2025, and 51% of suppliers expected to be reshored or nearshored by then

Logistics and transportation delays

  • Inefficient routes and poor coordination with logistics providers can create delays

  • External disruptions such as the weather, natural disasters or port congestion

  • Port congestion has increased by four times between March 14 and April 25, 2023, which shows just how quickly bottlenecks can escalate. Better coordination with logistics partners can also improve flexibility when transport conditions change

Rising costs

  • Increasing transport, storage and material costs, with shipping costs, rising fuel costs and raw materials shortages all pushing expenses higher

  • Without more efficient planning and sourcing, these pressures cut into margins instead of helping teams save money

  • Shipping costs surged to more than double their late 2023 levels in 2024. Raw material shortages were cited by 61% of respondents in 2023

These challenges impact:

  • Operational efficiency

  • Profitability

  • Customer experience

Supply chain challenges in the real world

Example 1

  • A company is always experiencing stock shortages

  • Forecasts don't have a clue about increased demand as well as the usual day to day variations

  • Inventory levels aren't aligned with demand because historical patterns and current signals aren't being used very well

Result:

  • Lost sales

  • Customer dissatisfaction

  • Increased operational pressure

Example 2

  • Goods are getting delayed in transit

  • Logistics processes are poorly set up

  • Deliveries are running late

This leads to:

  • Reduced service levels, which is a recipe for disaster

  • Bigger bills

Supply chain challenges can have a real impact on the business

Supply chain challenges can affect just about every stage of operations:

demand planning falls apart, because sourcing is all over the place, leading to inventory inaccuracies, warehouse delays, transport inefficiencies and late delivery

This can create:

  • Right across the board disruption

  • Reduced performance - it's a vicious cycle.

The key causes of supply chain challenges

Understanding what's really going on is crucial.

Disconnected systems

  • Different systems talking to each other

  • Data is locked away in silos across departments

Manual processes

  • Still relying on spreadsheets or manual updates

  • Increased risk of errors and lost productivity

Poor data quality

  • Out of date or just plain wrong information

Complex supply networks

  • Dealing with a whole lot of suppliers and locations

  • Difficult to get control of and manage

External factors

  • Market changes driven by geopolitical risks

  • Supplier disruptions linked to trade wars

  • Global events that can impact global trade and the whole supply chain

COVID-19 really highlighted the vulnerabilities in global supply chains. Last year, 80% of organisations faced supply chain disruptions.

These causes really highlight the need for:

  • Strong systems that are reliable

  • Clear processes that make sense

  • Better data management - it all starts with good information

How to overcome supply chain challenges

Organisations can tackle challenges by putting new solutions into place.

Get some visibility

  • Implement real-time tracking systems so you can see whats going on

  • Use analytics and dashboards to help increase visibility so you can make better decisions

  • 35% of firms are planning to introduce tracking technologies to reduce losses

Improve your demand planning

  • Use advanced forecasting tools and models

  • Make sure your supply and demand are perfectly in sync to help you stay ahead of changes in customer demand

Get a handle on inventory management

  • Implement inventory control systems

  • Use automated replenishment, balancing lean stock with just in time models - it's a delicate balance

Strengthen your supplier relationships

  • Diversify your suppliers

  • Keep a close eye on supplier performance

Improve logistics

  • Use transportation management systems to get the best out of your logistics

  • Optimise routes and delivery schedules so you can get products to customers on time

Get your systems to talk to each other

  • Connect your ERP, warehouse and logistics platforms

These solutions will ensure:

  • Improved efficiency

  • Less risk

  • Better decision-making

Benefits of addressing supply chain challenges

When challenges are managed effectively, organisations can gain:

Efficiency

  • Faster and smoother processes

Accuracy

  • Reliable data and inventory

Visibility

  • Real-time insight into operations for more cost-effective control through better monitoring and faster response

Cost control

  • Reduced waste and inefficiencies, with better visibility and coordination that help reduce costs across transport, storage, and inventory

Resilience

  • Better able to handle disruptions

Supply chains become reliable and predictable, and that means building a resilient supply chain that can absorb disruption and recover quickly to help future proof your business.

Common challenges in modern supply chains

Today's supply chains face even more pressures.

Global complexity

  • Multiple regions and suppliers, which means supply chain managers have to coordinate across a global environment with different markets, partners, and operational requirements

Customer expectations

  • Faster delivery and higher service levels

Sustainability requirements

  • Reducing environmental impact

Digital transformation

  • Need to adopt new technologies so business leaders can proactively address ongoing disruption

These challenges require:

  • Strategic planning

  • Strong technology adoption

Why supply chain challenges increase over time

Over time supply chains just get more complex, systems get extended and data volumes go through the roof. Without proper management, inefficiencies grow, costs increase and performance declines. Supply chains need continuous monitoring and improvement.

The role of technology in overcoming challenges

Technology plays a key role in supply chain management, and modern supply chains rely on systems such as:

  • ERP platforms for core operations

  • Inventory management systems

  • Warehouse management systems

  • Transportation management tools

  • Analytics platforms

in fact, 61% of logistics managers report abnormal supply chain operations, which is why having better tools really matters.

These systems provide:

  • Real-time data

  • Process integration

  • Performance insights

Analytics platforms can also deliver cost-effective real-time insights.

The role of AMS in reducing challenges

Application management services (AMS) support:

  • System monitoring

  • Issue resolution

  • Data accuracy

  • Continuous optimisation

AMS ensures supply chain systems stay stable and performance improves over time.

How consultancy helps solve supply chain challenges

SAP and supply chain consultancy help organisations:

  • Identify key issues

  • Design effective solutions

  • Implement systems correctly

  • Optimise processes

This ensures supply chain challenges are addressed strategically.

So, what does an effective supply chain look like?

When it's working well:

  • Processes are connected

  • Data is accurate and real time

  • Inventory is managed efficiently

  • Logistics are optimised

  • Risks are controlled

The result is a supply chain that delivers consistent performance and reliability.

Glossary

Supply chain challenges- Issues that affect supply chain performance.

Demand forecasting- Predicting future demand.

Inventory management- Tracking and controlling stock.

Logistics- Transporting and delivering goods.

Integration- Connecting systems and processes.

AMS - Ongoing support and optimisation.

Frequently asked questions

What are the supply chain challenges that keep you up at night?

These are the issues that keep disrupting your supply chain operations and making it hard to keep things running smoothly

What are the most common supply chain nightmares?

  • Visibility, when you just can't see what's going on

  • Inventory woes, when you can't seem to keep track of what you've got or what you need

  • Supplier reliability, when they just can't be counted on to deliver

  • Logistics, when getting things from A to B is a whole lot harder than it needs to be