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What Is The New Supply Chain Normal?

Posted: June 16, 2009 by Ly Phan

What Is The New Supply Chain Normal?

With all the economic volatility, it was bound to happen that those in the supply chain would begin pondering on what is considered normal these days. SC Digest wrote an interesting piece about our changing practices and views on the supply chain, where the old ways of thinking really don’t apply anymore. Even with all the change, four trends are emerging:

 

Rising fuel prices

As oil is still the main energy source for transportation and the demand is still rising, especially the truck industry, fuel prices are expected to also increase. As a result, businesses now have to focus on network efficiency and effective coordination between shippers. Moreover, the industry will also rely more on train transportation for its fuel advantages.

 

Cautious consumer credit

After the economic recession, customers will be more cautious about spending with a drive to keep back-up savings and a distrust of banks. Thus, the process of recovery will be slow as their buying behavior will not change just in a couple of years.

   

Changing global consumer patterns

Driven by Chinese economic blooming, they are spending billions on logistics and communication infrastructure. Therefore, the "new normal" global supply chain will continue to see more trading and good flow from China, the US and Europe.

 

Return of North American port capacity

With the eventual economic recovery, US ports will have to face pressure on port capacity.  To overcome this challenge, it is important to improve and expand the US rail and its redistribution points.

 

What ties this together? Flexibility and visibility…companies need to be aware of what is happening in the external and internal environment, but the reality is that most have little idea. Strategic planning and management require knowledge and then having the ability and to execute effectively and quickly “to manage their supply chain for risk, resiliency, and sustainability.”

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