Chain Reactions

"World Trade" Sometimes Means "In My Own Backyard Trade"

There are a lot of companies and organizations that purportedly set themselves up as the ultimate authorities and/or enablers of global supply chains and global trade management. Did you ever stop to ask these people, "What exactly do you mean by global?'" It turns out that one man's globe is another man's interstate.

BDP International's Centrx consulting unit and St. Joseph's University in Philadelphia conducted a high-level survey of 220 supply chain executives at multi-national companies, and nearly half (48%) of them describe their supply chains as "global" and yet when pressed further to describe how they manage their "global" supply chains, it turns out that 60% say that supply chain decisions are regional or even local in scope. A mere 35% say their companies' supply chains are in fact managed globally.

Explaining this discrepancy, Yone Dewberry, managing director of Centrx, observes,"These results suggest that some multinational companies operate a series of what might best be described as multi-domestic rather than global supply chains. The reasons for this vary, but the unrelenting pressure to achieve per-unit cost reductions, in tandem with the emergence of true global data visibility, must hasten supply chain integration to accommodate the exigencies of international trade."

For those companies that actually have taken the time to develop their supply chains on an international level, the biggest concerns are on-time delivery (cited by 64% of respondents) and landed costs (39%). According to the survey, 80% say they can measure on-time delivery to customers, and 69% can also measure on-time delivery from vendors. In addition, 82% say they collaborate on shipment visibility with carriers, 42% with suppliers and 20% with customers.

Running contrary to standard lean manufacturing principles, the most frequent strategy to avoid global supply chain glitches is to increase inventory levels, which was mentioned by 46% of respondents. The next most popular strategy is sourcing from multiple countries (43%).

TAGS: Supply Chain
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