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2014 Supply Chain Focuses Include Resiliency and Reliability

Both global and domestic supply chain networks will need to become more resilient and reliable in order to better manage more volatile demand as well as pressures on margins, according to recent analysis by two consulting firms.

Simon Ellis, practice director for global supply chain strategies at IDC Manufacturing Insights, explained that while the world’s economies are expected to keep improving this year – with consumer confidence now at levels not seen since before the start of the “great recession” – demand for goods will continue to be volatile, requiring supply chains to be more quick, nimble and robust.

“Operational resilience will come to the forefront and underpin manufacturers' supply chain strategy moving forward," Ellis said. “It will no longer be enough to be ‘fast’ in terms of supply chain response; they will need to be ‘accurately fast.’ That is clearly dependent upon being demand aware and data driven, but it is also about digital execution: leveraging data to broaden and extend supply chain ‘intelligence.’”

He added that there will also be pressure placed upon supply chains to be more “demand oriented,” which in most cases means to be closer to the source of demand. While this dovetails with the “near-shoring” trend seen developing in the logistics field, it does not necessarily translate into more manufacturing moving back to North America from far-flung global locations.

“It’s about relocating production/assembly to the proximity of demand, wherever that demand might be,” Ellis pointed out. “The end result is that we’ll see production brought back to places that haven’t seen manufacturing for a while.”

Michael Zakkour, principal at global supply chain consulting firm Tompkins International, echoed that forecast in a conference call.

“You hear many different terms: right shoring, back shoring, re-shoring, in-shoring. A lot of these have been thrown about over the last couple of years [as] people are trying to determine whether or not manufacturing will come back to the U.S. and, if so, how much,” he explained.

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