Dec 1, 2007

Supply Chain Momentum Faltering?

These days it seems the easy phase of restructuring operations for global competitiveness is moving production offshore to low labor cost regions such as east asia. The hard part is getting the products to end-users reliably. The challenge goes beyond shipping costs - although problems in supply chains can certainly play havoc on cost structures. CEOs are finding that strategic and highly skilled supply chain managers are worth their weight in gold in today's global marketplace

. . . the surge in global trade in recent years has added to strains and charges for all forms of transport. As a result, some manufacturers are developing costly buffer stocks [to] avoid shutting down production lines, [shifting] to more expensive but more reliable modes of transport, [and] some companies are turning to new information technology to keep supply chains flowing. . . (Manufacturers Cope With Costs of Strained Global Supply Lines, WSJ).

There was a time in the early 1980s when distribution strategy was considered an oxymoron by most executives. Relegated to the bottom of most management team discussions, distribution and marketing channel strategy discussions back then were primarily concerned with shipping and warehouse management issues - hardly worthy of too much senior executive time.

Times have certainly changed, and there isn't a CEO around who isn't looking for a supply chain leader who can craft strategy, manage detailed tactics, structure winning partnerships, and create complex back-up plans and error recovery systems.

Let's hope these new supply chain leaders rise to the occasion. Articles like the one referenced above raise a red flag: buffer stocks and last minute high cost air transport feel like a step back in time!

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