Thursday, June 9, 2011

Supply Chain Trends

Supply Chain Digital takes a look at four of the biggest industry trends moving forward in 2011.
In an interesting read published last Thursday on, author Keith Prather took a look at four of the likely 2011 supply chain trends to monitor moving forward.
The piece is quite long, so we’ve paraphrased the four trends to make for an easier read, enjoy!
1.) Managing Total Landed Cost
The current trend is to incorporate Total Landed Cost (TLC) into more key business decisions, according to Sourcing parts overseas is a growing option, and providing a manager with TLC will allow for more visibility in supply chain decision making.
With labor prices rising in China and India, sourcing parts from home-based manufacturers is becoming more and more affordable.
2.) Inventory Management Strategies
Don’t let inventory problems tie up cash that could be used in more useful places. The ability for managers to reduce the timing and costs of inventory will be a huge focus this year, and better inventory strategies leave warehouse managers with no excuses if inventory costs rise.
3.) Managing Supply Chain Risk
Take a look at some of the global supply chain disasters that have struck since 2000. From 9/11 to soaring fuel costs to the recent Japan disaster, supply chain managers need to manage risk now more than ever.
Because the supply chain continues to go global, problems on the other side of the world can affect your supply chain now more than ever.
4.) Changing Transportation Environment
The options available for transportation are more endless now than they’ve ever been before. With truck driver shortages in the U.S. mounting, it’s estimated by the American Trucking Association that the nation will be more than 20,000 drivers short of meeting demand, which will drive up costs. Rising fuel costs will also give way to more expensive trucking costs, and will also raise air freight shipping prices.
Rail is the wave of the future, and offers an affordable solution when oil prices rise. An increase in intermodal transportation and increased rail infrastructure are leading indicators that freight rail will increase over the next year.

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