Managing supply chain risk a challenge, study finds

KPMG report shows few manufacturers have visibility in their supply chains

05/13/2013


Global manufacturers are putting their supply chains at the center of their business strategies to serve as the foundation for operational efficiency and collaborative innovation, according to KPMG's 4th annual Global Manufacturing Outlook. “Competitive Advantage: Enhancing Supply Chain Networks for Efficiency and Innovation,” which surveyed 335 C-level executives globally—including 95 in the U.S.

Ironically though, many manufacturing executives (49% globally; 54% U.S.) admit that their companies currently do not have visibility of their supply chain beyond Tier 1 suppliers. Moreover, only 9% of the 335 global respondents of the 2013 KPMG 2013 survey say they have complete visibility of their supply chains. That number is even lower among U.S. executives, with only 7% claiming complete supplier visibility.

Only 9% of the 335 global respondents of the 2013 KPMG 2013 survey say they have complete visibility of their supply chains. That number is even lower among U.S. executives, with only 7% claiming complete supplier visibility. Courtesy: KPMG

“Obtaining real-time visibility across all tiers in the supply chain can significantly increase speed to market, reduce capital expenditures and manage risk,” said Jeff Dobbs, Global Sector Chair, Diversified Industrials and a partner with KPMG in the U.S. “Moving toward a demand-driven supply chain is probably the single most important step a global manufacturer can take today.”

However this could prove challenging, as Dobbs points out that “much of the supply chain technology is outdated.” In fact 44% of respondents overall say they still use email, fax and mail as the means to communicate issues about demand in the supply chain.

“The winners will be the ones who can network real-time across their entire supply chains, reducing the information lag that costs companies significant time and money,” Dobbs added.

When asked about their ability to assess the impact of an unplanned supply chain disruption, a similarly small percentage of executives, (9% global; 7% U.S.) say they are able to assess the impact within hours. However, the most frequent response among global executives was between one and six (36%) and U.S. respondents most frequently said between one and two weeks (32%).

To help manage supply chain risk and continuity in the event of unanticipated disruptions, executives (58% globally; 71% U.S.) say they plan to regionalize or localize their supply chains.

Overall, China and the U.S. remain the top sourcing locations, but the report shows that many will keep sourcing closer to their major markets over the next two years. Nearly 90% of U.S. respondents will increase sourcing in the U.S. followed by Canada (18%) and China tied with the U.K. at 13%.



No comments
The Top Plant program honors outstanding manufacturing facilities in North America. View the 2015 Top Plant.
The Product of the Year program recognizes products newly released in the manufacturing industries.
The Engineering Leaders Under 40 program identifies and gives recognition to young engineers who...
Hannover Messe 2016: Taking hold of the future - Partner Country status spotlights U.S. manufacturing; Honoring manufacturing excellence: The 2015 Product of the Year Winners
Inside IIoT: How technology, strategy can improve your operation; Dry media or web scrubber?; Six steps to design a PM program
World-class manufacturing: A recipe for success: Finding the right mix for a salad dressing line; 2015 Salary Survey: Manufacturing slump dims enthusiasm
Getting to the bottom of subsea repairs: Older pipelines need more attention, and operators need a repair strategy; OTC preview; Offshore production difficult - and crucial
Digital oilfields: Integrated HMI/SCADA systems enable smarter data acquisition; Real-world impact of simulation; Electric actuator technology prospers in production fields
Special report: U.S. natural gas; LNG transport technologies evolve to meet market demand; Understanding new methane regulations; Predictive maintenance for gas pipeline compressors
Warehouse winter comfort: The HTHV solution; Cooling with natural gas; Plastics industry booming
Managing automation upgrades, retrofits; Making technical, business sense; Ensuring network cyber security
Designing generator systems; Using online commissioning tools; Selective coordination best practices

Annual Salary Survey

Before the calendar turned, 2016 already had the makings of a pivotal year for manufacturing, and for the world.

There were the big events for the year, including the United States as Partner Country at Hannover Messe in April and the 2016 International Manufacturing Technology Show in Chicago in September. There's also the matter of the U.S. presidential elections in November, which promise to shape policy in manufacturing for years to come.

But the year started with global economic turmoil, as a slowdown in Chinese manufacturing triggered a worldwide stock hiccup that sent values plummeting. The continued plunge in world oil prices has resulted in a slowdown in exploration and, by extension, the manufacture of exploration equipment.

Read more: 2015 Salary Survey

Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Society for Maintenance and Reliability Professionals an organization devoted...
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.
This article collection contains several articles on the vital role that compressed air plays in manufacturing plants.
This article collection contains several articles on the Industrial Internet of Things (IIoT) and how it is transforming manufacturing.
click me