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Smaller Manufacturers Reject Global Supply Chain StrategiesFriday, July 16, 2010 > 13:45:55
(Transport Intelligence – John Manners-Bell)
Global consultancy IDC Manufacturing Insights has recently conducted a worldwide study of over 700 small and medium-sized enterprises (SMEs) in the manufacturing industry on behalf of Infor and IBM.
One of the key results of the study found that manufacturers, while pressured to reduce costs, have pulled back on the prevalence of low-cost country sourcing. According to the survey, there seems to be an increased focus on the importance of customer fulfilment in contrast with a previous emphasis on low-cost sourcing strategies.
The consultancy asserted that low-cost sourcing could result in lower responsiveness and poor customer service, higher costs, and additional risk factors such as supply chain disruptions, diminished IP protection and environmental concerns. The study indicated that North American and European manufacturers would focus on improving their own operations for the medium-term as opposed to aggressively looking to sourcing partners to cut costs.
One of the general conclusions of the survey was that manufacturers were struggling to ensure customer fulfilment due to complex and global supply chains. This made gaining control over the 'customer experience' very challenging.
The results of the survey perhaps should be seen as an opportunity for companies involved in global logistics services rather than the more obvious threat implicit in the findings. The challenge for logistics and transportation companies will be to provide SMEs with the reliability and visibility which they clearly lack and which is hindering their adoption of global sourcing strategies. The survey suggests that a greater focus on the needs of smaller businesses could pay dividends for logistics companies.