Tiers before bedtime

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Almost half of manufacturing executives globally admit that their companies currently do not have visibility of their supply chains beyond Tier 1 suppliers, according to KPMG’s 4th annual Global Manufacturing Outlook – Competitive Advantage – Enhancing Supply Chain Networks for Efficiency and Innovation.

And the figure was higher for the US at 54 per cent. The KPMG survey also found that only nine per cent of the 335 C-level executives surveyed say they have complete visibility of their supply chains.

I am sure that many will find that surprising, given the focus that there has been on supply chain visibility over the past few years. Perhaps even more surprising is the fact that 44 per cent said that they still used email, fax and mail to communicate issues about demand in the supply chain.

And only nine per cent said they had the ability to assess the impact of unplanned disruption within a few hours. For 36 per cent it would take between one and six days – and for 32 per cent it would take up to two weeks.

Supply chain disruption has had a significant impact on some major industries over the past couple of years, so it makes sense to look again at actions that can minimise risk. So perhaps it is not surprising that KPMG found that 58 per cent of executives planned to regionalise or localise their supply chains to help manage supply chain risk.

Clearly there are some big wins available. KPMG partner Jeff Dobbs points out that “real-time visibility across all tiers of the supply chain can significantly increase speed to market, reduce capital expenditures and manage risk”.

The question, of course, is how to achieve that visibility beyond Tier 1. And in an increasingly global economy, that can be the really tough challenge.

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