Too Many Losing Sleep Over Their Supply Chain
Posted on Wed, Feb 22, 2012 @ 07:43 AM
That’s the title of a recent story that ran in Material Handling & Logisitcs by Tom Andel which caught our eye. Far too many of the customers that come to DirecSource admit they’ve lost control of their supply chain. From raw material sourcing to manufacturing to shipping and logisitics there are so many moving parts that companies now must keep track of to ensure they stay on-time and on-budget.
At DirecSource – managing the supply chain for our branded partners is our business and we couldn’t agree more with what Andel says:
If there were a company listed on the New York Stock Exchange called “Your Supply Chain,” your broker would probably urge you to stay away from it. Too risky. And many corporate executives across the country agree—their supply chains are risky. According to a survey by McKinsey & Co. of more than 600 C-level executives across a range of industries worldwide, more than two thirds of respondents said that supply-chain risk had increased over the last three years, and they expected it to continue increasing over the n
ext five years—especially in the following areas:
• Global competition
• Complex patterns of customer demand
• Financial volatility
• Global markets for labor and talent
• Exposure to differing regulatory requirements
• Environmental concerns
A quarter of the respondents to the McKinsey study said they aren’t prepared for more pressure from global competition and more complex customer demand patterns. And 37 percent are unprepared for the other four areas. More recently, Dr. Jeff Karrenbauer, president of INSIGHT, a supply chain analytics and consulting service firm, commented on the effects of rising tensions between the U.S. and Iran.
“Open conflict in the Strait of Hormuz would be a nightmare for supply chains throughout the world, raising the cost of raw materials, manufacturing, transportation, warehousing, inventory…essentially every component of a supply chain,” he said. “We still find that the majority of companies have spent little or no time planning for such contingencies. That is astounding, troubling and frankly, a significant management failure.”
To read the rest of Andel’s Story click here.