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Supply chain flexibility requires considerable investment, as well as a top-down commitment from C-level execs.

However, that “extra” effort is proving very worthwhile, as companies that implement operational flexibility are now realizing significant business benefits, according to new survey results released last week by PRTM.

Based on interviews with senior executives from 150 companies across diverse industries, the new research identifies five specific “levers” that increase operational flexibility, drive revenues and cut costs. According to PRTM, companies that have implemented the five supply chain flexibility levers have achieved, on average, a 12 to 15 percent revenue increase while reducing supply chain costs by eight to 10 percent.

Here are a few survey results, grouped around PRTM’s supply chain flexibility levers: (more…)

An earlier study showed us that the US auto industry is poised for growth over the next few years.

Now, a new analysis concludes that the aerospace and defense industry can expect growth, too –although it’s likely that any gains on the commercial side will be counterbalanced with the burden of tightened national defense budgets.

Last week, the global business-advisory firm AlixPartners released a study which forecasts a 25 percent jump in commercial-aircraft deliveries by 2014, driven in large part by increasing air-traffic demand globally.

At the same time, however, the defense sector will be focused on affordability.

What will these contradictory challenges mean to supply chains? David Fitzpatrick, managing director at AlixPartners and co-leader of the firm’s Global Aerospace and Defense Practice, anticipates a bumpy ride.

“While bruised, the aerospace and defense industry emerged from the economic downturn in better shape than most industries, due largely to increased demand in the defense sector, plus some pretty vigilant cost-cutting overall,” he said. “However, the industry now faces the ‘big squeeze’ – the contradictory challenge of quickly ramping up production for expected growth in the commercial sector coupled with the need to address expected cuts and therefore a sharpened focus on affordability in the defense sector.  And those squeezed the most will be the supply chain.”

More specifically, the AlixPartners study predicts that global aircraft production is expected to increase 30 percent to 50 percent over the next three years. However, original-equipment manufacturers (OEMs) will face several challenges as they ramp up to meet this demand.  For instance, OEMS will need to: (more…)

Is US manufacturing poised for a renaissance?

A new study by The Boston Consulting Group (BCG) says it is –and I find the analysis quite convincing.

For starters, BCG points out that the gap between US and Chinese wages is narrowing rapidly. Thanks to the demand for skilled labor in China, Chinese wages are rising at about 17 percent per year, while the value of the yuan continues to increase.

At the same time, flexible work rules and a host of government incentives are making many states—including Mississippi, South Carolina, and Alabama—increasingly competitive as low-cost bases for supplying the US market.

According to BCG, net labor costs for manufacturing in China and the US are likely to converge sometime around 2015.

Factor in the costs, risks and headaches of inventory and shipping, and the advantages of offshoring shrink even more.

The BCG analysis, which is part of an ongoing study of the future of global manufacturing, concludes that: (more…)

A new study predicts that over the next 15 years, the global automotive industry will undergo the greatest transformation in its history.

In particular, the Automotive Landscape 2025 study, conducted by Roland Berger Strategy Consultants, forecasts six significant automotive trends: (more…)

Even though the federal government has failed to pass meaningful climate change and energy legislation, “greening the supply chain” remains a priority for many companies. Businesses are turning to their supply chains to eliminate waste, reduce their environmental impact and diminish risks associated with climate change and resource depletion.

Now, more than ever before, a wide range of stakeholders, including commercial customers, consumers, investors, analysts and others, is demanding transparent information about the lifecycle of products and services.

To help you get your arms around these environmental concerns, Ernst & Young LLP has identified five specific climate change and sustainability risks to supply chain operations. This list includes: (more…)