Global Supply Chain Complexity

The corporate world has spent enomous time and resources trying to reduce risks, lower costs and improve efficiencies from their supply chains, which now stretch globally. This article offers some insights into how manufacturers are trying to cope with these challenges.

A new global benchmarking study by Deloitte & Touche examines how intense pressure to reduce costs, innovate products and expand into new markets has manufacturers shifting production and spreading out supply chain and other operations beyond their home geography. The report looks at the increasingly complex and fragmented supply chain environment, the implications to manufacturers and the resulting challenges.

The study also uncovers five emerging paradoxes as a result of supply chain complexity:

- Despite globalization, most supply chain optimization is done locally.

- Supply chains are not fully equipped to support accelerating innovation.

- Flexibility is more difficult to achieve in the face of shorter product cycles, increased customer demands, the pursuit of lower-cost locations and the race to new markets.

- While managing risk is a priority, fragmented supply chain initiatives are increasing potential risk.

- While customer service is a priority, less than 8 percent of companies collaborate on a high level with customers on key initiatives.

More than 500 companies from North America and Europe participated in the benchmark study. Industries represented include aerospace and defense, automotive, life sciences, manufactured consumer products, process and chemicals, high technology and telecommunications and metal fabrication, industrial machinery and equipment.

Download the report here.