At Smarter Supply Chains – Atlanta Regional Conference, Karen Butner addressed chief supply chain officers' feedback on globalization, as part of the Global Chief Supply Chain Officer Study.
Asia continues to be the leading region for sourcing direct materials and is expected to continue to grow, with Eastern Europe also expected to be a fast-growing region. The anticipated three-year growth in sourcing from Asia was 61 percent, and for Eastern Europe, 43 percent. No surprise that North America and Western Europe are looking at declines. Central and South America and Africa also are looking to see some growth.
The costs issues with regard to globalization continue to be around delivery issues and reliability of commitments; lead times often are greater than expected; quality issues remain a problem; and regulation is an issue. Chief supply chain officers are concerned about the increased complexity that comes with the global supply chain.
The bottom line: costs are significant for global sourcing, and the complexity is non-trivial, but companies are still committed to manage through those costs and the complexity because they still perceive advantages in global sourcing in regions like Asia and Eastern Europe. And organizations viewed as having "leading supply chains" (based on AMR's Top 25 Supply Chains) are doing better at managing both the costs and complexity associated with their global supply chains.
|Supply Chain authority Andrew Reese is Editor of Supply & Demand Chain Executive. He has been invited by IBM PR to attend this show as a blogger and speaker. Like all other speakers, Andrew will receive all speaker benefits including travel and board.|