Emerging Supply Chain opportunities in 2010?

December 7th, 2009 5:00 pm Category: Supply Chain Improvement, by: Alan Kosansky

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If you like a challenge, then you probably think of 2009 as the best of times. Whether you are a manufacturer, transporter, or supply chain service provider, 2009 was a year filled with change. These changes, compounded by reduced access to capital, probably meant that you had to do more with less. Creative solutions were rewarded; business as usual probably didn’t cut it.

So what can we expect for 2010? Many of the same challenges will persist: Shifting demands, volatile expenses (especially those related to fuel), and continued pressure to be prudent with capital expenditures. At the same time, some industries will lead the way out of the recovery, while other will struggle with recessionary pressures.

Like a homeowner after a hurricane, many companies will take the time to assess the damage, and begin the re-building effort. What they are likely to find is that their operations have become out of sync with their supply chain network and infrastructure.

2010 will see many companies working to re-align their supply chain infrastructure with the needs of their customers and their recession driven changes to supply chain operations. This might include things like re-aligning manufacturing capability to geographic demand, rationalizing your distribution network and channels to current demand patterns, or re-negotiating supplier arrangements to more appropriately reflect new supply chain realities.

As spring cleaning prepares you for sunny times after a long cold winter, the supply chain work ahead will allow the industrious to excel. Change typically causes supply chain infrastructure and supply chain operations to become mis-aligned. Severe change, like most of us have experienced over the past 18 months only exacerbates the problem. The year ahead will be the time to re-align our supply chains and get the most out of the limited capital we will have available to us. Some specific actions to consider include:

  • Determine if your distribution network has been re-aligned to meet the changes in your demand.
  • Analyze your transportation strategy – are you leveraging your volume to negotiate the best rates from a strategic carrier base?
  • Re-evaluate your manufacturing strategy – Are you sourcing the right products from the right locations to minimize your total delivered cost, including manufacturing costs, raw material supply costs, transportation costs and inventory?

Good luck in your work ahead!

If you would like to learn more about our Supply Chain Optimization services, please contact us. And if you would like to receive future updates on the supply chain optimization industry, subscribe to our SCO Journal and our SCO Newsletter.

Contributed by Dr. Alan Kosansy, Profit Point’s President.

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