PRTM: Companies Face Significant Supply Chain Hurdles Now That Economy is Rebounding

July 2, 2010
Container manufacturers aren't the only ones ill-equipped to meet a significant upturn in demand. New research from PRTM suggests that global corporations, in general, face significant hurdles with their supply chains now that the economy is starting to ...
Container manufacturers aren't the only ones ill-equipped to meet a significant upturn in demand. New research from PRTM suggests that global corporations, in general, face significant hurdles with their supply chains now that the economy is starting to rebound. PRTM's Global Supply Chain Trends 20102012 Surveythe largest annual survey of global supply chains ever conducted by the firm polled nearly 350 senior management execs from Europe, the Americas and Asia. The study found that even though these execs are optimistic about the future, most are concerned that their global operations won't be able to keep pace with new demand. For example: More than half of respondents expect average gross margins to surpass 10 percent over the next three years. However, three-quarters said demand and supply volatility, coupled with poor forecast accuracy, will be the biggest roadblocks they face in capturing profits from the economic upturn. More than 85 percent of companies expect supply chain complexity to grow significantly by 2012, due to the challenges of serving new global customerstheir primary source of revenue growth. Complexity will be driven by delivering products and services to new locations and by the number of product variations required to meet the expectations of these new customers. To mitigate risk, more than 65 percent of survey participants list end-to-end supply chain practices at the top of their management agendas. Deep-diving into the the specific supplier network concerns facing global companies, PRTM compiled a list of what it considers the top five challenges facing supply chains today. The list includes: Consumers are increasingly price sensitive and less brand-loyal, resulting in commoditization and a permanent increase in supply chain volatility.While most participants are looking to international customers for growth, few are prepared for the complexity that results from serving customers with regionally customized products. End-to-end supply chain cost optimization will be critical in the future. Risk and opportunity management should span the entire supply chain, including those of key partners. Existing supply chain organizations are not truly integrated or empowered.

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