Supply Chain Risks

Material costs, supplier stability cited by manufacturers.

More than one-third of North American manufacturers say they've experienced a significant supply chain disruption in the past three months, according to a recent MFGWatch survey.

The October 2009 survey targeted both supply-side manufacturers and buy-side original equipment manufacturers (OEMs) throughout North America. When asked if they or their customers had experienced a significant supply chain disruption in the past three months, 38% of both buy-side and supply-side manufacturers indicated that they had. While more than 50% of each group said their supply chains had been stable, 38% indicated a high level of activity in managing and responding to risk.

With regard to specific supply chain risks, buy-side OEMs cited material costs (47%) and supplier stability (39%) as the most important issues to their companies. Supply-side manufacturers identified customer stability as their most important issues (82%).

The MFGWatch survey also found that North American manufacturers are seeing business conditions stabilize. While both audiences say they've reduced staff during the past three months (suppliers 43%, buyers 28%), they also expect to maintain or add more employees in the next three months (suppliers 72%, buyers 75%).

"As North American manufacturing emerges from recession and continues to become more global, businesses are finding supply chain risk mitigation and management to be top of mind," said Mitch Free, CEO of MFG.com, an online sourcing marketplace. "This survey shows that while extended supply chains are presenting manufacturers with immediate challenges, they are also seeing stabilization in business activity, as evidenced by their expectations to hire more employees."

The supply-side survey drew responses from 408 providers of manufacturing parts and services. Purchasing professionals and engineers from 197 OEMs participated in the buy-side survey. An array of industries, including automotive, aerospace, medical, industrial equipment, consumer products and textiles were represented in the survey.

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