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

The Coalition for Transportation Productivity (CTP)called on Congress to take a close look at data recently issued by the Department of Transportation (DOT) in its “Comprehensive Truck Size and Weight Limits Study, ” and focus on reforming Interstate vehicle weight limits for six-axle trucks.

A recent report published by The Boston Consulting Group (BCG) and the Grocery Manufacturers Association makes clear the supply chain challenges consumer packaged goods (CPG) shippers are up against, with some of these challenges, specifically transportation-related ones, gaining traction in recent years.

Join Evan Armstrong, president of Armstrong & Associates, as he explains how creating a balanced portfolio of "Top 50" global and domestic partners can maximize efficiency and mitigate risk. Using the precise metrics captured in Armstrong’s most recent study, he'll demonstrate how shippers can measure ROI and plan for the future.

At $2.832 per gallon, the average price per gallon was down 1.1 cents, following drops of 1.6 and 1.1 cents the previous two weeks and a cumulative 8.2 cent cumulative drop over the last six weeks.

The index ISM uses to measure non-manufacturing growth—known as the NMI—was 56.0 in June, which edged out May by 0.3 percent.

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