IDC study suggests manufacturers have learned their lessons

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.”

By ·

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

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 [email protected]

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!

Latest Whitepaper
Lead your organization through the driver shortage and over-the-road regulations.
Potential transportation disruptions are looming as increased over-the-road regulations are set to go into effect in 2017. Experts believe these regulations will further impact the already challenged driver pool as well as reduce driver productivity.
Download Today!
From the January 2017 Issue
Following LM tradition, we start off the New Year with our annual “Rate Outlook” cover story and subsequent Webcast
Moore on Pricing: The other TMS functional options
2017 Rate Outlook: Where are freight transportation rates headed?
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
2017 Rate Outlook: Where are freight transportation rates headed?
Join our panel of top oil and transportation analysts for an exclusive look at where rates are headed and the issues driving those rate increases over the coming year.
Register Today!
EDITORS' PICKS
2017 Rate Outlook: Will the pieces fall into place?
Trade and transport analysts see a turnaround in last year’s negative market outlook, but as...
Logistics Management’s Top Logistics News Stories 2016
From mergers and acquisitions to regulation changes, Logistics Management has compiled the most...

Making the TMS Decision: Ariens Finds Just the Right Fit
The third time is the charm for this U.S. manufacturer on the hunt for a third-party logistics (3PL)...
Motor Carrier Regulations Update: Caught in a Trap
The fed is hitting truckers with a barrage of costly regulations in an era of scant profits....