Everything looks a bit crazy right now, doesn't it? Oil and energy prices are fluctuating. The ongoing worldwide debt crisis is having a chilling effect on government spending. There are shocks in the global stock markets. Japan is recovering from its disaster. Youth riots and public unrest are spreading from North Africa to the Middle East to Europe. And there are concerns about how road, railway, port, and other transportation upgrades will be funded if regional budgets thin out even more.
If you think the electronics segment will be isolated from these evolving events, think again. In more ways than one, they will collide head-on with near-term supply chain and logistics management plans.
On one extreme side, companies will want to make sure their distribution warehouses are secure and out of harm's way. That warning is a few days late for Sony Corp. (NYSE: SNE), which was already beaten down by last spring's earthquake and tsunami in Japan and ended up with another black eye this week. One of its distribution centers in London was burned down during the riots there.
Supply chain managers will also want to check out the increased merger and acquisition activity in the transportation and logistics industry, particularly within the shipping and passenger air verticals. First-quarter deal activity in this industry jumped nearly 15 percent from the same quarter last year, according to "Intersections," a quarterly analysis of global M&A activity in the transportation and logistics industry by PricewaterhouseCoopers International .
This kind of uptick probably warrants at least a few phone calls to shipping companies to get a status check on their businesses and to review partnership criteria for all shipping partners.
M&A activity is worth following for another reason: It could be a tipoff for infrastructure improvement trends. If governments continue to slam the brakes on spending and put major capex projects on hold, businesses may well step in and step up deal negotiations, PwC said. "Continued interest and activity in transportation infrastructure remains a key driver for M&A in the sector." And the momentum is expected to continue as regional and national authorities grapple with the need to make transportation infrastructure improvements while pursuing fiscal austerity.
From all indications, austerity is an item that remains on a worldwide wish list. Talk of a double-dip recession, very jittery stock markets, and softening international demand and manufacturing outputs will once again give pause to electronics companies. Sales forecasts, currency translations, and product planning could soon be swept into another very uncertain business tornado.
Given the big-picture chaos unfolding in the world, now is as good a time as any to take another look at the supply chain dashboard and figure out how to steer around the roadblocks and speed bumps popping up.