Is Business Sustainability Localizing Supply?

The financial pressures and business sustainability risks felt heavily during the economic downturn forced many companies across all industries to take drastic reduction measures to simply survive. These actions placed many supply chains in less than stable shape, as ‘bullwhip’ effects rippled up the chain. Fast forward to today’s more positive outlook, we’re now witnessing a ramp in demand and many supply chains are simply unable to keep up. Combine this demand surge with increases in transportation costs, and our sustainability consulting finds companies reevaluating the sustainability of ‘global’ supply.

The 21st Century Supply Chain constantly evaluates and reevaluates the shifting trends in the supply chain. The recent post, Will on-shoring be the trend for 2011/2012?, examines some of the increasing threats of off-shoring. In fact, the article suggests that an on-shoring or near-shoring movement is gaining speed. The idea is to bring manufacturing back to demand.

“Companies are beginning to realize that having offshored much of their manufacturing and supply operations away from their demand locations, they hurt their ability to meet their customers’ expectations across a wide spectrum of areas, such as being able to rapidly meeting increasing customer desires for unique products, continuing to maintain rapid delivery/response times, as well as maintaining low inventories and competitive total costs.”

A growing focus on sustainable supply chain management over the past few years has proven to be a huge business improvement opportunity for many businesses. With traditional procurement strategies primarily focused on cost savings through activities such as outsourcing and off-shoring, a shifting sustainability mindset is elevating supply chain thinking.

Article by Julie Urlaub, Taiga Company, appearing courtesy 3BL Media.

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