Subscribe to our free, weekly email newsletter!


Reducing overall supply chain costs top priority among manufacturers, notes IDC study

By Patrick Burnson, Executive Editor
July 09, 2012

When IDC Manufacturing Insights announced the results of the 2012 U.S. Supply Chain Survey, analysts were surprised by some of the findings.

The survey which examines the state of the industry, and how manufacturers are adapting and improving their supply chains, also explores and how technology plays a role in enabling manufacturers to be more successful.

“We were expecting respondents to say they were continuing to invest in technology,” said IDC Manufacturing Insights Practice Director, Kimberly Knickle, “but we were pleasantly surprised that product quality was also ranked high on their list of priorities.”

“Business Strategy: 2012 Supply Chain Survey-Manufacturing Priorities and New Technology Adoption” is based on feedback from 350 U.S. manufacturers. It found more than despite being product-centric organizations, 80 percent of respondents rate reducing overall supply chain costs as the number one supply chain priority in the coming year.
Nearly 55 percent suggest supply chain agility is second and 52 percent suggest improving product quality and safety is the third most important priority.

When asked to rate the level of importance of new technology areas, big data/analytics came out on top, followed by mobility, cloud computing/software as a service and social business tools.

In an interview, Knickle said “reverse logistics” represented a large piece of the puzzle.

While manufacturers face increasing complexity as customer demand diversifies and supply globalizes, supply chain organizations are adapting to respond to requirements such as:
-Complex and extended global supply networks
-Volatile demand
-Growing regulation, particularly in the area of traceability
-Pressure to be more agile and increase the clock speed of the supply chain
-The “rise” of the savvy consumer
-To address these challenges, IDC Manufacturing Insights has found:
•-Manufacturers continue to increase the amount of low-cost country sourcing. IDC

Manufacturing Insights recommends revisiting the profitable proximity sourcing approach and how that concept, supported by IT, can ensure sourcing decisions to create a competitive edge.
-Most manufacturers view their supply chains as focused primarily on product quality, yet their supply chain priorities usually start with reducing costs, followed by responding to supply or demand changes, ahead of product quality and customer service.
-With IT-based solutions for demand planning and forecasting and production scheduling viewed as key to manufacturers’ business performance over the next year, this could signal a genuine shift to a more holistic approach to truly integrated business planning, inclusive of fulfillment excellence.

Big data and mobility are the most important new technologies for manufacturers’ supply chains. IDC Manufacturing Insights believes there is substantial value to how manufacturers can use these to improve their agility and customer service.

“According to our findings, the key supply chain challenge facing all manufacturers today is the juxtaposing of complex and extended supply networks with increasingly fast and volatile demand networks – and the increasingly ineffective role for inventory as a way to buffer cadence mismatches,” said Simon Ellis, Practice Director.

“While there is anecdotal evidence to suggest that 2012 may indeed represent the most challenging time in the history of the manufacturing supply chain, significant opportunities also abound in terms of the supply chain this year,” he added.

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 Department of Transportation’s Bureau of Transportation Statistics (BTS) reported this week that U.S. trade with its North America Free Trade Agreement (NAFTA) partners Canada and Mexico increased 8.2 percent from September 2013 to September 2014 at $102.2 billion.

NS said that the D&H lines it plans to acquire connect with the NS network at Sunbury, Pa. and Binghamton, N.Y. and give NS single-line routes from Chicago and the southeast U.S. to Albany, N.Y., which is in close proximity to NS’ Mechanicville, N.Y.-based intermodal terminal.

This follows a 1.6 cent decrease last week, which was preceded by a 5.4 gain the week before and stands as the first increase going back to the week of June 23, when the weekly average headed up 3.7 cents to $3.919 per gallon.

BNSF said that its 2015 capital expenditures will be allocated towards various areas of its business, including maintenance and expansion of the railroad to meet the expected demand for freight rail service, with 2015 representing the third straight year BNSF has invested a record annual capital expenditures investment.

While the ongoing labor negotiations between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) ostensibly going from bad to worse, following the ILWU’s announcement late last week that it was halting negotiations from November 20 through November 30, a Congressional group last week penned a letter to PMA and ILWU leadership expressing concern over the state of the negotiations.

Comments

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


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA