30.05.2007

Logistic market tends to globalise

Logistic market tends to globalise.

Nearly half (48%) of supply chain executives at multi-national companies in the chemical, consumer goods, industrial and retail sectors consider their supply chains to be global, yet operating decisions made on behalf of those supply chains would indicate otherwise. Indeed 60% of these executives said supply chain decisions in their companies are regional or local in scope, according to a recent study conducted by BDP International`s Centrx consulting unit and St. Joseph`s University in Philadelphia, USA. Just 35% of respondents reported their companies` supply chains are managed globally.

"These results suggest that some multinational companies operate a series of what might best be described as multi-domestic rather than global supply chains," said Centrx Managing Director Yone Dewberry. "The reasons for this vary, but the unrelenting pressure to achieve per-unit cost reductions, in tandem with the emergence of true global data visibility, must hasten supply chain integration to accommodate the exigencies of international trade."

The globalization of trade has brought with it a dramatic increase in companies’ sourcing and delivery points, which inevitably has resulted in longer lead times and a need to improve regulatory understanding. Cited by 64% of all respondents (87% European; 55% North American), on-time delivery is the single most pressing issue facing their supply chains.

However 43% of all respondents reported shorter lead times, reflecting investment by their companies in supply chain technology and management systems. These included warehouse management, ERP and TMS systems. Most of the 32% of respondents whose companies had not made such investments reported longer lead times. More than a third (35%) of all respondents` companies had not implemented advanced technology in their supply chains.

Among the strategies companies are pursuing to hedge against the vagaries of their far flung supply chains are increasing inventory levels, cited by 46% of study participants, and sourcing from multiple countries (43%). Also cited were increased outsourcing activity and investment in trade compliance and security. Significantly, over three-quarters of those surveyed reported increasing investment in compliance and security programs.