Executive Briefings

Survey Reveals Significant Supply Chain Risks, Increased In-shoring

For the fourth straight quarter, more than one-third of North American manufacturers responding to the quarterly MFGWatch survey said they've experienced a significant supply chain disruption in the past three months - with over half (51 percent) indicating they had suffered disruption.

Twenty-one percent of OEMs said they've returned some production to North America from low-cost countries in the second quarter of 2010, up from 12 percent in the previous quarter. Well over one-third (38 percent) said they will be researching bringing production into or closer to North America in the third quarter of 2010, up from 31 percent in the last quarter.

Also, for the fourth straight quarter, over one-third of SMMs (42 percent) said they've received inquiries or work from companies suffering from supply chain disruptions.

"While the economy in North America seems to be cooling down, there are positive signs," says Mitch Free, founder and CEO of MFG.com. "The most perplexing data is around supply chain disruptions; this quarter, over half indicate they've experienced a significant disruption. This number represents a tremendous level of instability and waste."

Large manufacturers continue to express optimism, with 43 percent expecting to increase the number of suppliers they engage for production, up from 32 percent in the previous quarter. However, only 8 percent actually grew their stable of suppliers - the third straight quarter with such disparity.

Similarly, nearly one-third (31 percent) expected to increase employment in the second quarter of 2010, but only 20 percent did so.

"The stated job losses within large manufacturers is troubling because we need to see more consistent employment growth," says Free.

The latest MFGWatch survey targeted nearly 500 supply-side manufacturers, as well as buy-side OEMs and sourcing professionals throughout North America. Respondents represent an array of industries, including automotive, aerospace, medical, industrial equipment, consumer products and textiles.

To download a copy of this report, visit www.mfg.com/en/mfgwatch 

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For the fourth straight quarter, more than one-third of North American manufacturers responding to the quarterly MFGWatch survey said they've experienced a significant supply chain disruption in the past three months - with over half (51 percent) indicating they had suffered disruption.

Twenty-one percent of OEMs said they've returned some production to North America from low-cost countries in the second quarter of 2010, up from 12 percent in the previous quarter. Well over one-third (38 percent) said they will be researching bringing production into or closer to North America in the third quarter of 2010, up from 31 percent in the last quarter.

Also, for the fourth straight quarter, over one-third of SMMs (42 percent) said they've received inquiries or work from companies suffering from supply chain disruptions.

"While the economy in North America seems to be cooling down, there are positive signs," says Mitch Free, founder and CEO of MFG.com. "The most perplexing data is around supply chain disruptions; this quarter, over half indicate they've experienced a significant disruption. This number represents a tremendous level of instability and waste."

Large manufacturers continue to express optimism, with 43 percent expecting to increase the number of suppliers they engage for production, up from 32 percent in the previous quarter. However, only 8 percent actually grew their stable of suppliers - the third straight quarter with such disparity.

Similarly, nearly one-third (31 percent) expected to increase employment in the second quarter of 2010, but only 20 percent did so.

"The stated job losses within large manufacturers is troubling because we need to see more consistent employment growth," says Free.

The latest MFGWatch survey targeted nearly 500 supply-side manufacturers, as well as buy-side OEMs and sourcing professionals throughout North America. Respondents represent an array of industries, including automotive, aerospace, medical, industrial equipment, consumer products and textiles.

To download a copy of this report, visit www.mfg.com/en/mfgwatch 

Read Full Article