COST-CUTTING IN MANUFACTURING SUPPLY CHAIN NOT WORTH DISRUPTIONS

General

A new report on supply chain issues faced by manufacturers found big operational problems at many manufacturing firms – especially when cost-cutting was concerned.

State of the Global Supply Chain by GT Nexus, which sells cloud platforms, is the result of a poll of 250 senior manufacturing leaders regarding their supply chain operations.

The research showed that more than 75 percent of the companies hit hard by supply chain disruptions operate without a Chief Supply Chain Officer, with 40 percent of them reporting supply chain disruption during the past year from technology challenges, labor strikes, weather issues, terrorism, social unrest, as well as a shortage of well-trained employees.

At the same time, many companies report difficulty keeping up with the changing customer demands (27 percent) and more believe they will be impacted by currency fluctuations and geopolitical risk (29 percent).

According to a GT Nexus spokesman, the research suggests that,m for some companies, “their execution roadmap may be misguided, being focused more on cost cutting, for example, than more mission-critical things like having a senior supply chain leader in place.” The report identifies a supply chain leadership deficit as the biggest challenge the industry faces going forward.

At ICAT Logistics Detroit, we know from experience that strong supply chains are absolutely critical to corporate performance – especially for manufacturers. Well-run supply chains help reduce costs and boost efficiency. It’s not an area where it makes sense to cut corners.

Building and maintaining a top-performing supply chain at a global manufacturing business takes careful, strategic planning, measurement based on analytics, strong sourcing and delivery networks, and a world view.

In a business landscape where customers demand speed and reliability, the GT Nexus report underscores just how important it is to avoid disruption by having the right supply chain leadership in place and working with reliable partners.

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