Q: What is the state of global supply networks in manufacturing?
A: There is no doubt that risk has gone up dramatically in the new millennium, but also supply chains are expected to run tighter than was expected a decade ago. These risks have been piling up as supply lines become extended, market entrants take major share seemingly overnight, products are proliferating and lifecycles shortening, innovations are commoditized in record time, commodity swings are massive in a short period, and customer expectations are continuously increasing — all at a time when financial and geopolitical stability have taken major body blows. It's certainly a time when supply chain professionals can add value.
It is best to define the risks in a spectrum from unpredictable unknowns (acts of nature, terrorist attacks, market dislocations) over which a company has no direct control, to predictable unknowns (supplier failures, forecast variability, execution shortfalls), which a company can influence, if properly prepared to do so. Research has demonstrated that the vast majority of exposure is in the area of predictable risks that are poorly managed. In fact, globalization has reopened risks — especially supplier reliability and lead-time variability — that were not such a challenge when primary suppliers were just a short hop away via car or plane, and language, culture, and international trade law were minimal considerations.
Q: What are the top three business drivers impacting the state of the supply chain?