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What Are Your Supply Chain Management Strategies For The Recovery?

Posted: July 15, 2009 by Ly Phan

What Are Your Supply Chain Management Strategies For The Recovery?

The 2009 State of Logistics Report was released this week by the council of supply chain management professionals (CSCMP), and surprisingly, the report for 2008 wasn’t exactly brimming with good news. More than 3,000 trucking companies went out of business last year and industrial production fell almost 8%. With rising inventories due to lagging demand, warehousing costs shot up close to 10%.

As a result, the total cost of logistics in the United States is at $1.3 trillion, with the drop in Air cargo while truck, rail, ocean, and domestic water transportation are slightly increasing. 

If this shows us anything, it’s that businesses need to be even more vigilant about analyzing their supply chains for ways to make them more productive and efficient. From a more practical sense, just knowing which suppliers and carriers are still in business is essential. 

The reality, however, is that most companies are doing the exact opposite all for the sake of slashing costs which means they’ll even be worse off as the economy recovers. There is a domino effect on the supply chain when companies shut down that tends to be underestimated or ignored.

Thus, it is essential to find potential "nearshoring" sources in the Americas and optimize their supply chain network to cut down the cost.  Moreover, businesses will have to rely more on rail and inland waterways to take advantage of lower fuel usage and reduce emissions.

The lesson: if you’re already reviewing your supply chain strategy, then you’re way ahead of the game. If you’re not, then your competition is already way ahead of you.

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