Supply Chain Cost Reduction Tops Manufacturing List

While rapidly changing supply chain logistics has companies racing to keep up, cost reduction tops the manufacturing wish list.

IDC Manufacturing Insights‘ 2012 U.S. Supply Chain survey of 350 companies ranks manufacturing priorities as 1) cost-reduction (80 percent), 2) supply chain agility (55 percent), and 3) product quality improvement and safety (52 percent).

Although manufacturers view supply chains as focused on product quality, survey results showed it takes a back seat to cost reduction and responding to changes in supply and demand.

Customer Demand

Survey respondents identify several factors that add to the manufacturing challenges.

  • Expanding, complex global networks
  • Increasing regulation
  • Demands for faster transport and delivery

The survey reveals manufacturers are turning to enhanced technology as one solution. They view global platforms that deliver planning, forecasting, and production scheduling with transparency along the supply chain as critical to improved performance.

“To optimize supply chain costs without sacrificing service, manufacturers need access to large, global transportation networks and technology that provides increased visibility and control,” explained Bob Shellman, Odyssey Logistics & Technology (OL&T’s) President and CEO, “A traditional transportation management system (TMS) will only give clients access to their own network.”

Access to expanded markets is critical to remaining competitive. Band-aid solutions in technology do not hold up to the complex and volatile nature of today’s global supply chain. IDC observed that need may cause a “genuine shift to a more holistic approach to integrated business planning.”

Success Stories