Supply Chain in Flex Presents Major Challenges for OEMs

The business of the supply chain is rife with risk, and few organizations are truly ready for it. It's not that these OEMs don't care. Rather, their priorities get mixed up and the best road to successful execution can be hard to chart. And most don't have executive representation in the C-suite.

“Supply chain disruptions get a lot of attention in the press. And stuff will continue to go wrong in the supply chain, but manufacturers are focusing mostly on reducing cost rather than risk,” said Greg Kefer, vice president, corporate marketing at GT Nexus, told EBN. “And most have no supply chain officer reporting to the CEO of the company. I'm surprised that these companies aren't screaming for more robust processes and better visibility since supply chains are increasingly global and distributed, which translates into a highly-fluctuating model.”

These were some of the findings of the State of the Global Supply Chain report, conducted by GT Nexus released last week. In fact, 40% of manufacturers experienced a disruption in the last 12 months, according to research from GT Nexus and YouGov. Yet, three quarters of those surveyed report that they don't have a chief supply chain officer in place. The study, which polled 250 U.S.-based senior manufacturing executives, set out to identify the biggest supply chain issues facing manufacturers in the coming year.

The focus on reducing cost even increases risk in many cases. “Particularly in high tech, where the supply chain is often mostly outsourced and lean, there's no padding when something goes sideways, whether it's the floods of a few years ago in Thailand or an airport that's been shutdown for a week while a runway is being paved,” said Kefer.

The advent of cloud-based technologies allows OEMs to link a variety of partners seamlessly. “You can do things now that you couldn't dream of ten years ago,” said Kefer. “Now that the cloud has gotten mature and we've gotten past the trust hurdle, it presents an interesting opportunity for companies to get their entire network of the supply chain on the same page.”

To stay competitive, organizations need to look at the supply chain as a competitive differentiator rather than a cost center. “By giving customers really good information about good are parts, companies can leverage it as part of the customer service offering,” said Kefer. “They are using it the company sticker, help them perform better and take them out of the equation of negativity.” 

To get more information about the study, take a look at the infographic from GT Nexus below. Then let us know in the comments section how your company is thinking about risk, cloud-based supply chain management, and the supply chain getting a seat at the corporate table.

— Hailey Lynne McKeefry, Editor in Chief, EBN Circle me on Google+ Follow me on Twitter Visit my LinkedIn page Friend me on Facebook

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