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How to Identify Supply Chain Bottlenecks in Your Organisation: A Practical Guide for Improved Efficiency

Learn how to identify supply chain bottlenecks and improve efficiency in your organisation with our practical guide. Optimise
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Global Supply Chain Group - vivek BWVivek Sood: Sydney based managing director of Global Supply Chain Group, a strategy consultancy specializing in supply chains. More information on Vivek is available on and more information on Global Supply Chain Group is available 

Vivek is the Managing Director of Global Supply Chain Group, a boutique strategy consulting firm specialising in Supply Chain Strategies, and headquartered in Sydney, Australia . He has over 24 years of experience in strategic transformations and operational excellence within global supply chains. Prior to co-founding Global Supply Chain Group in January 2000, Vivek was a management consultant with top-tier strategy consulting firm Booz Allen & Hamilton.

Vivek provides strategic operations and supply chain advice to boards and senior management of global corporations, private equity groups and other stakeholders in a range of industries including FMCG, food, shipping, logistics, manufacturing, chemicals, mining, agribusiness, construction materials, explosives, airlines and electricity utilities.

Vivek has served world-wide corporations in nearly 500 small and large projects on all continents with a variety of clients in many different industries. Most of projects have involved diagnostic, conceptualisation and transformation of supply chains – releasing significant amount of value for the business. His project work in supply chain management has added cumulative value in excess of $500M incorporating projects in major supply chain infrastructure investment decisions, profitable growth driven by global supply chain realignment, supply chain systems, negotiations and all other aspects of global supply chains.

Vivek has written a number of path breaking articles and commentaries that are published in several respected journals and magazines. Vivek has spoken at several supply chain conference, forums and workshops in various parts of the world. He has also conducted several strategic workshops on various aspects of supply chain management. He received his MBA with Distinction from the Australian Graduate School of Management in 1996 and prior to these studies spent 11 years in the Merchant Navy, rising from a Cadet to Master Mariner.

More information on Vivek is available on  and more information on Global Supply Chain Group is available on

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Supply chain bottlenecks can hinder the smooth flow of goods and services, leading to delays, increased costs, and decreased customer satisfaction. Identifying supply chain bottlenecks is critical to improving a company’s operations, reducing costs, and increasing profitability. In this blog post, we will discuss how to identify supply chain bottlenecks in your organization and possible ways to mitigate these problems.

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Identifying Supply Chain Bottlenecks

1. Slow Supplier Lead Times

One of the most common supply chain bottlenecks is slow supplier lead times. This occurs when a company’s suppliers take longer than specified timeline  to provide the necessary raw materials or finished goods. Slow supplier lead times can cause delays in production and delivery, leading to increased costs and decreased customer satisfaction.

To identify slow supplier lead times, companies should track the lead times of their suppliers and compare them to industry benchmarks. If a supplier’s lead time is significantly longer than industry standards, it could indicate a bottleneck in the supply chain. Geopolitics can have a significant impact on a company’s operations. 

For example, if a supplier is located in a country that has certain trade protection policies in place, it can result in longer delivery times which will  increase the costs. In such cases, a company may find it more advantageous to work with a domestic supplier.

When faced with these kinds of challenges, it is important for companies to carefully evaluate their options and weigh the potential costs and benefits. This may involve conducting a thorough analysis of their supply chain and identifying any bottlenecks that could be impacting their operations. It may also involve exploring alternative sourcing options, such as working with suppliers in different regions or countries.

2. Poor Inventory Management

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Poor inventory management can also lead to supply chain bottlenecks. This occurs when a company orders too much or too little inventory, leading to excess inventory or stockouts. Excess inventory ties up valuable capital and increases storage costs, while stockouts can lead to delayed deliveries and decreased customer satisfaction. One critical aspect of achieving this goal is having a robust demand forecasting and fleet management software in place. Without these essential tools, it can be nearly impossible to remain competitive and profitable in today’s marketplace.


To identify poor inventory management, companies should regularly conduct physical inventory counts and compare them to their inventory records. They should also track inventory turnover rates and lead times to ensure they are ordering the right amount of inventory at the right time.

3. Inefficient Transportation

Inefficient transportation is another common supply chain bottleneck. This can be caused by inefficient routing, poor communication between drivers and dispatchers, or vehicle breakdowns. Inefficient transportation can lead to delays, increased costs, and decreased customer satisfaction.  Inefficient transportation can have a negative impact on a company’s bottom line, as it can result in increased costs due to fuel waste, overtime pay for drivers, and vehicle repairs. It can also lead to decreased customer satisfaction, as late deliveries or damaged products can harm a company’s reputation and result in lost business.


To identify transportation bottlenecks, companies should track the time it takes for shipments to move from one location to another and compare it to industry benchmarks. They should also monitor delivery times and ensure they are communicating effectively with their transportation providers.

4. Inadequate Technology

Inadequate technology can also lead to supply chain bottlenecks. Outdated software systems, a lack of real-time tracking, and a lack of automation are some of the common technology-related issues that can cause problems in the supply chain. Legacy Software systems can be slow and inefficient, causing delays in data processing and communication. 

A lack of real-time tracking can make it difficult for companies to monitor the movement of their cargo and respond quickly to changes in demand or other factors. A lack of automation can result in errors and delays in tasks such as order processing, inventory management, and invoicing. These issues can, in turn, result in decreased customer satisfaction, lost sales, and reduced profitability.


To identify technology bottlenecks, companies should review their technology systems and assess whether they are meeting their needs and providing the necessary data to manage their supply chain effectively. They should also consider investing in new technology to streamline their supply chain processes.

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5. Capacity Constraints

Capacity constraints can also lead to supply chain bottlenecks. This occurs when a company’s production capacity or transportation capacity is not sufficient to meet their demand. Capacity constraints can lead to delays, increased costs, and decreased customer satisfaction.

To identify capacity constraints, companies should track their production and transportation capacity and compare it to their demand. If their capacity is significantly lower than their demand, it could indicate a bottleneck in the supply chain.

Mitigating Supply Chain Bottlenecks

1. Improve Supplier Relationships

Effective communication is critical to building strong supplier relationships. Companies should maintain regular communication with their suppliers, providing them with accurate forecasts of their needs and keeping them informed of any changes or issues that may impact their orders. By sharing information in a timely and transparent manner, companies can help their suppliers plan and prepare for their needs, reducing the risk of delays or errors. 

In addition to communication, companies can also work to establish clear expectations for lead times with their suppliers. This can involve setting specific deadlines for order placement and delivery, as well as establishing processes for handling expedited orders or other urgent requests. By establishing clear expectations and processes, companies can help their suppliers prioritise their orders and ensure that they are delivered on time. They should also consider working with multiple suppliers to ensure they have a backup in case of delays.

Companies can also explore ways to incentivise their suppliers to improve their lead times. This can involve offering bonuses or other rewards for timely delivery or implementing penalties for late deliveries. By incentivising their suppliers to prioritise their orders, companies can help ensure that they receive the materials they need on time, reducing the risk of delays in their supply chain.


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2. Improve Inventory Management

Poor inventory management can lead to stockouts, overstocking, and other issues that can impact a company’s profitability and customer satisfaction. To mitigate these risks, companies should implement an inventory management system that allows them to track their inventory levels, turnover rates, and lead times. In addition to tracking inventory levels, an inventory management system can also help companies track turnover rates and lead times. Turnover rates provide insight into how quickly products are selling, helping companies to adjust their inventory levels to meet demand. 

Lead times provide information about how long it takes to receive products after placing an order, enabling companies to plan for the timing of their orders and avoid delays. Implementing an inventory management system can be a significant investment for companies

They should also consider implementing a just-in-time (JIT) inventory system that allows them to order the right amount of inventory at the right time.


3. Optimize Transportation

Optimizing transportation routes involves identifying the most efficient routes for delivering products and scheduling deliveries in a way that minimizes travel time and distance. By using route optimization software and other tools, companies can identify the most efficient routes for their delivery trucks, reducing the risk of delays and improving delivery times.

Effective communication with transportation providers is also critical to mitigating transportation bottlenecks. Companies should establish clear expectations for delivery times, provide real-time updates on delivery schedules, and work closely with their transportation providers to address any issues that arise. By maintaining open lines of communication, companies can help ensure that their products are delivered on time and that any delays are addressed quickly.


Finally, investing in advanced fleet management software can provide companies with real-time visibility into their transportation operations, enabling them to track delivery schedules, monitor vehicle performance, and optimize their routes in real-time. By leveraging advanced technologies like GPS tracking, companies can gain greater visibility into their transportation operations, reducing the risk of delays and improving overall efficiency.


Identifying and mitigating supply chain bottlenecks is critical to improving a company’s operations, reducing costs, and increasing profitability. Slow supplier lead times, poor inventory management, inefficient transportation, inadequate technology, and capacity constraints are some of the common bottlenecks that can hinder the smooth flow of goods and services. To mitigate these bottlenecks, companies should maintain effective communication with their suppliers, establish clear expectations and processes, monitor and track their inventory turnover rates and lead times, assess their technology systems, and explore alternative sourcing options. By addressing these issues, companies can improve their supply chain efficiency, enhance customer satisfaction, and gain a competitive advantage in the marketplace.



The global supply chain of products is an immense and complex system. It involves the movement of goods from the point of origin to the point of consumption, with intermediate steps that involve resources, materials and services to transport them. A supply chain encompasses activities such as purchasing, production, distribution and marketing in order to satisfy customer demands. Companies rely on a well-managed supply chain to meet their business goals by providing quality products and services at competitive prices.

Efficiently managing a global supply chain requires considerable effort, particularly when dealing with multiple suppliers located around the world. Complex logistics tracking systems are needed to monitor product movements from one place to another. Technologies such as artificial intelligence (AI) can help companies keep track of shipments across different locations for greater visibility into their processes.

what did Our Reader say?

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global supply chain group

Chief Operating Officer Graphite Energy

I have experience with many of the well-known top-tier strategy firms but chose Global Supply Chain to support me on my supply chain projects. They always meet and exceed my expectations due to the quality of the work, the ability to work collaboratively with internal teams, and the flexibility to adjust the project approach when required.

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CEO - Large Global transnational corporation From: FOREWORD - OUTSOURCING 3.0

When I engaged Vivek’s services for supply chain transformation in one of the companies I was heading, we expected the careful and methodical approach that he was famous for... I was pleased to note that the original target set for 3 years was surpassed by almost 70% in just 18 months.

global supply chain group

Vice-President Supply Chain Asia Pacific

I have used their services for several business transformations and workshops in many companies. Each time an outstanding workshop and project result was delivered ensuring the success of the business transformation project. Savings surpassed $25 Million per annum in one case. Very powerful ideas, were implemented very diligently.

Global Supply Chain Group - Jean Briac Le Dean

Jean-Briac Le Dean
Co-Founder & Agen

Vivek is a very collaborative and open leader who leads teams by example. Whether internal teams, or clients teams, all are impressed by his intensity, energy level and drive to make things a little better.

Global Supply Chain Group - Lorna Calder Johnson

Lorna Calder Johnson
Omni-Channel Product Marketing
P & L Executive

Vivek's transformation expertise is apparent from his results and dedication to operations and supply chains. His strategic expertise, knowledge and network make him a standout even among an excellent team.

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