The challenge of managing global supply chains

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The need to build supply chain resilience has been rising in prominence. This is not a new issue and we have previously blogged on how, in an uncertain world, manufacturers are managing the risk of disruption and are employing a range of methods to respond. In a workshop on Managing Global Supply Chains yesterday, part of EEF's Manufacturing Conference, we heard three companies comment on what they are doing to improve their understanding and reduce the risk of supply chain disruptions.

  • Mark Adams from Toyota Motor Europe spoke about how they are working with suppliers to improve competitiveness.
  • John Hammon from SAP outlined some of the tools available for gathering and analysing supply chain information.
  • Ian Metcalf from Brother discussed how supply chain mapping and the right information can help companies be more responsive to changes in demand.

Some key take-outs from the discussion:

Collaboration can help overcome some of the key challenges facing manufacturers

  • Key challenges today's manufacturers face include distance to market, length of the supply chain, speed of innovation, price competitive markets, exchange rates, the need to have a global view of business, and communication.
  • Toyota Europe works with suppliers to teach them LEAN manufacturing techniques and to solve problems facing the sector. Through mutual support they aim to reduce waste and lower costs, a move which is important in a market facing price wars, low margins, over-capacity and recession.
  • In question time, panel members made it clear that the aim of collaboration must be to maintain and improve competitiveness. Disclosure is an important part of mapping a supply chain.

Technology, if used correctly, can help manage supply chains and make manufacturers more responsive and flexible

  • Technology can be used to improve standardisation, facilitate operational comparisons and improvements in operational efficiency, and support faster reporting and decision making.
  • SAP analysis shows that the best supply chains score 37% higher on time delivery and have 89% lower inventory carrying costs.
  • Social media is newer technology that can speed the process of feeding consumer responses and perceptions back into the manufacturing process.
  • Brother found using the right technology to combine supply chain information allowed them to make smooth adjustments to production and communicate changes along their supply chains. Better visibility of demand and supply chains allowed them to more responsive to changes in customer demand during the financial crisis than competitors.
  • Technology is not the answer in itself and should be used to support good processes. Supply chain processes are complex and technology can help understand and information to make managing them more effective.


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