E-Sourcing Forum » Supply Chain Risk

Supply Chain Risk – Medal Ceremony

October 8th, 2008 at 07:27am David Bush - Iasta

Of course, every one will guess China is one of them (in this case – Silver), but the others? Its America bringing home the Gold. Wheee! The Middle East and Africa tied for the bronze medal.

According to a recent AMR study, the US and China represent the highest risk for manufacturers.

Keeping manufacturing close to home allows companies’ better visibility into their supply chains and increased oversight into day-to-day operations. 34% of companies are planning to near-shore their sourcing and manufacturing due to increasing cost-competitiveness, while 15% indicated lessened supply chain risk due to proximity to market as their primary reason to near-shore.

“Globalization is coming home partly because so much risk is associated with spreading the supply network around the world,” explained Noha Tohamy, research director at AMR Research.

But for manufacturers selling products in the U.S., the lure of China still exists. Despite significant risks, like product quality issues and political unrest, China still makes sense because of cost advantages (49% of respondents that plan to source from China cite lower labor costs as their primary reason) and reach to vast consumer markets. To further mitigate risk, companies have begun building better IT-based supply chain visibility (42%), employing multisourcing strategies (27%), and building performance-based collaborative relationships with suppliers (44%).

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