Subscribe to our free, weekly email newsletter!


IDC study suggests manufacturers have learned their lessons

By Patrick Burnson, Executive Editor
January 20, 2011

As U.S. manufacturers begin to realign their supply chains with tactical and strategic initiatives, how will the recent recession inform their decisions?

That question and others is addressed in the recently issued IDC Manufacturing Insights: Supply Chain Strategies: “Top 10 Predictions.”

In putting this study together, IDC analysts Simon Ellis and Kimberly Knicle, learned that while manufacturers are ready spend again, many are still reeling from the the recession’s aftershock.

“We see a slow return to basics,” said Ellis in an interview with LM. “They are not buying ‘solutions’ per se, as they understand that there’s not really any ultimate answer to every shipping and sourcing challenge.”

Rather, he said, manufacturers are ready to invest in tactical applications which can be used for long-term strategic objectives.

Indeed, one of IDC’s predictions is that supply chain visibility will climb on the IT application priority list as manufacturing companies increasingly identify critical use cases to drive both cost savings and improved service levels.

“It was really not so long ago that S&OP was a major component in any company’s portfolio,” said Ellis. “And guess what? It’s back again.”

He added that although demand forecasting continues to be important, supply chain organizations will begin to recognize the critical role of supply-side responsiveness.

“Which means stripping out complexity and trying to simplify again. Back in my days with Unilever, this was our mantra. Now, it seems, that a lot of other multinationals are falling into line.

Among other predictions made in the study:
-Supply chain visibility will climb on the IT application priority list as manufacturing companies increasingly identify critical use cases to drive both cost savings and improved service levels.
-In the context of taking a broader view of total cost, supply chain organizations will gain a new appreciation for shortening lead times through profitable proximity sourcing strategies.
-Cost containment, and the desire for variable supply chain structures, will continue to drive outsourcing of operations, but will also bring a more enlightened perspective to SaaS and “skills resourcing.”
-Supply chain modernization will pick up speed again as manufacturing companies look to drive fulfillment excellence through transportation, warehouse, and labor management tools.
And perhaps most importantly of all, said Ellis, companies will begin hiring again.

“A jobless is recovery is an unsustainable recovery,” he said. “We are not saying that there will be a wholesale move to create a new workforce, but we do see manufacturers beginning to invest in people again.”

About the Author

image
Patrick Burnson
Executive Editor

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Last week, the United States Department of Transportation took further steps to address various issues identified in recent train accidents involving crude oil and ethanol shipped by rail. The announcement was made by DOT with other DOT agencies, including the Federal Railroad Administration (FRA) and the Pipeline and Hazardous Materials Safety Administration (PHMSA).

Logistics Management Group News Editor Jeff Berman had an opportunity to interview Derek Leathers, President and Chief Operating Officer of Werner Enterprises, at this month's NASSTRAC Shippers Conference and Transportation Expo in Orlando. They discussed various aspects of the truckload market, including prices, fuel, and regulations.

During this webcast our presenters will apply the findings of the 23rd Annual Trends & Issues in Transportation and Logistics Study to the world of shipper-carrier decision making. They'll examine the primary aspects that will influence the future direction for shipper-carrier decision-making.

For February, the month for which most recent data is available, the SCI dropped to -1.0 from January’s 2.6, with FTR explaining that the short term positive impact from one-time adjustments for rapidly dropping diesel prices and the suspension of the 2013 motor carriers hours-of-service expires later this year.

Seasonally-adjusted (SA) for-hire truck tonnage in March was up 1.1 percent on the heels of a revised 2.8 percent (from 3.1 percent) February decline, with the SA index at 133.5 (2000=100). This is off 0.3 percent from the all-time high for the SA of 135.8 from January 2015 and is up 5 percent annually.

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA