Avoiding the Perils of Going Global

September 13th, 2006 at 07:43am David Bush - Iasta

Recently, Global Logistics & Supply Chain Strategies published an article entitled Supply Chain Management: The Perils of Going Global where they emphasized the perils of low cost country sourcing, wrought with budget overruns caused by underestimated transportation costs, uncertain lead times, long order-cycle times, bad data, and fluctuating demands.

According to the article, the solution is to get a better handle on supply chain cost, including the true cost of transportation, border-crossing issues, and higher levels of inventory against supply interruption, enabled by good processes, center-led procurement, and accurate, real-time visibility backed by solid web-based systems. (After all, the greatest category of budget overruns when sourcing from China is transportation - both in terms of underestimated costs and order expediting costs.)

That’s why Global Supply and Spend Visibility is becoming so important - and why Aberdeen is spending a considerable amount of time researching the issue and publishing great studies on it - including the Global Supply Benchmark Report and a forthcoming study specific to spend management and supply management.

So where do you start? By employing eSourcing and eProcurement across your organization so that you can get a grip of what you are spending, on whom, and where your costs are likely to lie. Then you can employ sophisticated spend analysis technologies to determine which key suppliers you need to partner with to ensure visibility and accuracy and which portions of your supply chain constitute the highest risk and develop plans to weatherproof them.

And what’s the best way to start? An on-demand solution with zero-day turnaround. Don’t put off until tomorrow what you can do today - it will only cost you in the long run!

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Entry Filed under: Functionality, General, Global Supply Issues/Risk, Spend Analysis