10 Speedbumps To Global Supply Chain Velocity, And 10 Solutions
published: cw 37, 2005 in Emerging markets & outsourcingThe shift of manufacturing to China and elsewhere is lengthening supply lines and complicating the job of logistics managers. Here are some of the major problems that result?and some proposed cures. The world is speeding up. New products appear on store shelves at a dizzying rate. Retailers demand faster and more frequent deliveries from manufacturers. And manufacturers lean on their suppliers for ?just-in-time? shipments of parts to the assembly line. Not a good time for everything to come to a screeching halt.
Unfortunately, that?s just what has happened over the past two years. The stampede of manufacturing to China and other low- cost countries, combined with overall growth in world trade, new security concerns and a revolution in ?big-box? retailing, has created massive congestion at key points throughout the logistics pipeline. For consumer goods suppliers, it has never been more vital to get product to market on time. And it has never been more difficult to achieve.
Blame China, one might say. The rush to capitalize on that country?s cheap and plentiful labor force has lengthened supply lines and created numerous opportunities for delay. But the real problem is that companies haven?t matched their new manufacturing strategies with changes in process and technology. For a global supply chain to succeed, each potential glitch must be answered by a new way of moving physical goods, information and cash. Here, then, are 10 common problems caused by the trend toward offshore manufacturing?and 10 possible solutions to achieving true supply chain velocity.
1. West Coast port congestion.
Solution : Look for transportation alternatives.
2. Longer supply lines create more delays and ?black holes? of information.
Solution: Adopt creative distribution strategies that reduce the number of stops.
3. Lack of infrastructure in the origin country.
Solution: Look for sourcing alternatives closer to home.
4. Shippers lack visibility of order status information.
Solution: Embrace technology to speed up information velocity.
5. Longer supply lines conflict with trends in product assortment.
Solution: Enact better planning and execution at the manufacturing stage.
6. More international shipments mean new regulatory headaches.
Solution: Get with the program. There?s no alternative to cooperating fully with customs officials.
7. Inventory levels are rising, as a buffer against delays.
Solution: Look for new ways of managing inventory, to speed up order fulfillment & eliminate waste.
8. It?s getting harder to devise accurate demand forecasts.
Solution: Use optimization and collaboration techniques in supply chain planning.
9. Global supply chains are threatened by corporate disunity.
Solution: Tear down the walls, once and for all.
10. Relentless pressure to cut costs has a negative impact on supply chain velocity.
Solution: Start thinking big.
Want to read the detailed solutions? Click here for full article from Robert J. Bowman of SupplyChainBrain.com
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