Today's ever-expanding supply chain offers businesses greater opportunities for efficiency and success in the growing global business environment. The instantaneous and constant flow of data, products and services around the world, however, brings with it a greater risk of violating the numerous and often complex U.S. trade compliance laws and regulations. Businesses that fail to set up policies and procedures to ensure compliance face risks ranging from shipment delays to hefty fines and penalties.
Automakers like Ford rely on thousands of tier-one suppliers to provide the materials, parts and services to make its final products. Many suppliers serve numerous automakers, and each of those suppliers, in turn, has multiple suppliers. Other industries' supply chains (such as electronics) are intertwined into the automotive supply chain. There are often six to 10 levels of suppliers between an automaker and the source of raw materials that eventually enter the manufacturing process. The breadth, depth and interconnectedness of the automotive supply chain make it especially challenging to effectively manage business and sustainability issues.
Managing inventory requires skillfully balancing a variety of complicated and competing objectives. Supply management professionals responsible for inventory have to control inventory holding costs, such as warehousing and financial opportunity costs, while pursuing cost savings that may be obtained with larger purchases. They also simultaneously support ambitious customer service levels for a constantly expanding product portfolio. Of course, supply managers who focus on inventory know these pressures well.