Supply chain management (SCM) involves integrating suppliers, production, distribution, and customers to improve response times and flexibility. SCM faces several challenges in Pakistan, including unstable petroleum prices, lack of proper adoption of channels, and favoritism. To improve SCM in Pakistan, companies should focus on accurate forecasting to reduce inventory losses, use inventory management software for visibility and traceability, and integrate logistical processes with suppliers. Adopting cloud-based SCM systems and using real-time dashboards can also help companies improve supplier management.

1. Date: 13-May-2015
Supply Chain Management, Its issues and
challenges in Pakistan
Supply Chain Management (SCM) has gained significance as one of the
21st century’s manufacturing technology and innovative paradigms for
improving considered a competitive strategy for integrating suppliers
and customers with the objective improving response time and
flexibility.
Competitiveness in today’s marketplace depends closely on the ability
of a firm to grip the challenges of reducing lead-time, cost estimation,
increasing customer service levels and improving product quality.
Conventionally, sourcing, production, distribution and marketing have
been working independently.
Unfortunately, although they seem to be working towards a common
goal, the organizational units have different objectives. Nowadays, the
focus is shifting toward digitally integrated demand and Supply Chain
(SC) configurations that are built around establishing networks of
relationships between the firm, its suppliers, customers and partner
entities.

2. Issues Faced in Pakistan:
Unfortunately, there is no explicit narration of SCM or its activities in
the literature. The ultimate success of firms will depend on
management’s ability to integrate the company’s intricate network of
business relationships, allowing improved decision making and
consequently, reducing cost and customer response time.
SCM is not only this but much more and beyond. SCM concerns neither
to minimize nor to maximize but rather to optimize (integration,
coordination, variability, uncertainty management and control)
processes for the enterprise.
An efficient and responsive SCM aims to move from a simple SC Figure
1 (a) to a well structured and extended SC Figure 1 (b).

3. Challenges faced in Pakistan:
 Taxation and other heavy charges
 Petroleum prices instability
 No proper channels adoption
 Favourisms
 Limited resources
 No Reliability
 Less capability holding vendors
Various ways to Improve SCM in
Pakistan:
Few of the areas in which supply chain management processes
could be improved are as follows:
 Greater emphasis may be given on accurate forecasting to
avoid losses resulting from failure to sell pre-ordered
material.
 For items where backup support from the main supplier has
been stopped, the enterprise has to keep some inventory to
provide backup support to its customers.
 Cost reduction for a better inventory control.
 The purchase committee should also take care in placing
orders against anticipated customer orders. If possible, an
agreement should be made with the supplier where it will

4. be bound to take back the materials if the expected
customer order is not received.
 Understand the importance and various aspects of software
utilization for a good inventory management through
visibility and traceability of information.
Ways to improve in IT for supply chain in
Pakistan
Recent innovations in the world of supplier management include an
embracing of cloud-based technology. This dovetail nicely into the
mobile device revolution, as companies now use Smartphone’s and
tablet computers for real-time access to data about their supply chain.
Some of the current best-of-breed tools and techniques to improve
supplier management in Pakistan are as follows:
1. Employ cloud-based systems that offer cost savings and operational
efficiencies.
One of the major advantages of cloud-based systems is the ability to
leverage the domain experts found in the companies providing these
systems. Small businesses usually don’t have the budget for their own
IT department. By using a supplier management system in the cloud, a
business enjoys access to a team focused on the software and
networking hardware side of the shop. This frees up internal staff to
run day-to-day business operations and results in operational savings
and efficiencies.
2. Use real-time dashboard reporting to take the pulse of a supplier
chain.
A management system must provide robust capabilities for real-time
reporting. This should include on-screen dashboards that provide a

5. view of the entire supplier chain. The software also needs to offer
clients for the major mobile platforms, including iOS, Android, Windows
Phone, and BlackBerry. Additionally, these mobile dashboard screens
need to effectively scale between the Smartphone and tablet form
factors, which is easier to do in iOS.
Reporting is vital for tracking overall chain performance and metrics.
Data for short orders, inventory turns, and on-time shipments need to
be easily accessible. This information is crucial for improving the
efficiency of any supplier management system.
3. Integrate logistical processes with suppliers.
No matter the size of a business, it remains important to integrate
logistical processes with the suppliers for that organization. While not
totally dependent on software systems, certain enterprise resource
planning (ERP) applications help to facilitate communication and
synergies between a business and its supplier community. If a supplier
is able to access the rate at which a business runs through its inventory,
they are better able to meet any changes in demand, improving
operational efficiencies for both organizations.
4. Choose an ERP application that fits with existing systems.
Small companies need to choose an ERP system wisely. The advantages
of cloud-based software and robust dashboards were discussed earlier,
but it is highly important that any ERP application seamlessly integrates
with existing applications. Some SCM software even works as a module
within small business accounting software like QuickBooks.
5. Don’t skimp on SCM training for internal personnel.
It is important not to overlook internal training of employees in the
concepts of SCM and logistics. When everybody in the chain is
comfortable with their individual role within the overall process, the

6. entire system works more smoothly and provides a positive impact to
the bottom line.
Improving a small business’s supplier chain processes doesn’t have to
be a complex task. Implementing these five techniques is a great way to
ensure a small firm’s logistics chain runs more efficiently by minimizing
costs, improving profits, and ultimately leading to a more successful
business.