Stuart O'Brien, Author at Total Supply Chain Summit | Forum Events Ltd
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Stuart O'Brien

Third of supply chain leaders re-evaluating China operations

33% of supply chain leaders globally have either moved sourcing and manufacturing activities out of China or plan to do so in the next two to three years, with the COVID-19 pandemic just one of several disruptions cited that have put global supply chains under pressure.

That’s according to new research from Gartner, which surveyed of 260 global supply chain leaders in February and March 2020 across a range of industries, including high-tech, industrial and food & beverage, in North & South America and the EMEA and APAC regions.

“Global supply chains were being disrupted long before COVID-19 emerged,” said Kamala Raman, senior director analyst with the Gartner Supply Chain Practice. “Already in 2018 and 2019, the U.S.-China trade war made supply chain leaders aware of the weaknesses of their globalized supply chains and question the logic of heavily outsourced, concentrated and interdependent networks. As a result, a new focus on network resilience and the idea of more regional manufacturing emerged. But this kind of change comes with a price tag.”

For decades, China has been the go-to destination for high-quality, low-cost manufacturing, and it has established itself as a key source of supply for almost all major industries including retail and pharmaceutical. However, Gartner research showed that the margin between those companies planning to add jobs in China versus taking them away narrowed sharply in 2019. The primary reason is the increase in tariff costs.

“We have found that tariffs imposed by the U.S. and Chinese governments during the past years have increased supply chain costs by up to 10% for more than 40% of organizations. For just over one-quarter of respondents, the impact has been even higher,” Raman said. “Popular alternative locations are Vietnam, India, and Mexico. The second main reason for moving business out of China is that supply chain leaders want to make their networks more resilient.”

Only 21% of survey respondents believe that they have a highly resilient network today – meaning that they have good visibility and the agility to shift sourcing, manufacturing and distribution activities around quickly. However, 55% expect to have a highly resilient network in the next two to three years – a reaction to disruptions such as Brexit, the trade war and COVID-19.

However, resilience has a price. Fifty-eight percent of respondents agree that more resilience also results in additional structural costs to the network.

“We are at a crossroads in the evaluation of global supply chains that pits just-in-time systems designed to improve operational efficiency against just-in-case plans that emphasize planning and preparing for a range of plausible scenarios,” Raman added. “To find balance, supply chain leaders must engage in risk management to assess their organization’s willingness to take risk onboard and decide how to quantify that risk against other network objectives such as cost effectiveness.”

One-quarter of survey respondents stated that they have already regionalized or localized manufacturing to be closer to demand. Despite the cost of adding more players to the ecosystem and increasing the overall network complexity, regional supply chains can ease delays and shortages in times of disruption – if the model is economically viable.

“Many Western organizations will have to explore new forms of automation on the factory floor to decrease the costs of near- or onshore production. Some also favour a partial option, such as manufacturing in Asia and moving only the final assembly closer to the customer,” Raman concluded.

Image by wei zhu from Pixabay 

Total Supply Chain Summit: Two great events to attend in person or virtually!

With lockdown now easing, secure your place at either of the Total Supply Chain Summits that are running this year – attend in person or remotely via our new video meetings platform.

September 21st & 22nd, Heythrop Park, Oxfordshire

November 2nd & 3rd, Hilton Deansgate Manchester

Both events represent a unique opportunity to help you plan for the ‘new normal’ – the events have been adapted to ensure we are abiding by the social distancing rules, and therefore ensuring the health, safety and wellbeing of our event attendees and staff.

The events will have controlled numbers, prescheduled meetings and be hosted within a safe environment. 

We have increased the size of our meeting booths to allow for a 2-meter gap, and added a clear partition screen between all meeting participants. Plus, there will be clear floor markings throughout.

These Summits will go ahead either as a live or virtual event. Alongside meetings and networking, you can also enjoy a series of seminar sessions, to ensure you don’t miss out on the latest tips and challenges from leading industry experts.

You can also enjoy complimentary overnight accommodation, including all meals and refreshments throughout.

To secure your place and enjoy all the benefits of the Summits, click here to book your complimentary place.

Do you specialise in Supply Chain Software? We want to hear from you!

Each month on Supply Chain Briefing we’ll be shining the spotlight on a different part of the logistics market – and in July we’ll be focussing on Supply Chain Software.

It’s all part of our ‘Recommended’ editorial feature, designed to help supply chain industry buyers find the best products and services available today.

So, if you’re a Cost Reduction Solutions specialist and would like to be included as part of this exciting new shop window, we’d love to hear from you – for more info, contact Nick Stannard on n.stannard@forumevents.co.uk.

Here’s our features list in full:

July – Supply Chain Software.
Aug – Logistics & Operations Management
Sep – Labelling & Packaging
Oct – 3PL & 4PL
Nov – Order Fulfilment
Dec – Transport Planning & Load Optimisation

Join us this September at the Total Supply Chain Summit

With lockdown now easing, secure your place at the Total Supply Chain Summit, which will take place 21st – 22nd September as either a physical or virtual event.

It’s a unique opportunity to help you plan for the ‘new normal’ – the event has been adapted to ensure we are abiding by the social distancing rules, and therefore ensuring the health, safety and wellbeing of our event attendees and staff.

The event will have controlled numbers, prescheduled meetings and be hosted within a safe environment. 

We have increased the size of our meeting booths to allow for a 2-meter gap, and added a clear partition screen between all meeting participants. Plus, there will be clear floor markings throughout.

This Summit will go ahead either as a live or virtual event. Alongside meetings and networking, you can also enjoy a series of seminar sessions, to ensure you don’t miss out on the latest tips and challenges from leading industry experts.

You can also enjoy complimentary overnight accommodation, including all meals and refreshments throughout.

To secure your place and enjoy all the benefits of the Summit, click here to book your complimentary place.

Total Supply Chain Summit: All systems go for September

The Total Supply Chain Summit will take place 21st – 22nd September as either a physical or virtual event – and it’s a unique opportunity to help you plane for the ‘new normal’.

We have adapted the event layout to ensure we are abiding by the social distancing rule, and therefore ensuring the health, safety and wellbeing of our event attendees and staff.

The event will have controlled numbers, prescheduled meetings and be hosted within a safe environment. 

We have increased the size of our meeting booths to allow for a 2-meter gap, and added a clear partition screen between all meeting participants. Plus, there will be clear floor markings throughout.

This Summit will go ahead either as a live or virtual event. Alongside meetings and networking, you can also enjoy a series of seminar sessions, to ensure you don’t miss out on the latest tips and challenges from leading industry experts.

You can also enjoy complimentary overnight accommodation, including all meals and refreshments throughout.

To secure your place and enjoy all the benefits of the Summit, click here to book your complimentary place.

5 Minutes With… Les Brookes, Oliver Wight

In the latest instalment of our supply chain industry executive interview series we spoke to Oliver Wight EAME CEO Les Brookes about his company, industry opportunities, the challenges presented by COVID-19 and the importance of data for running business scenarios…

Tell us about your company, products, and services.

Oliver Wight are a global organisation that works with businesses to improve their planning capabilities, enable end to end supply chain integration, shape demand, and alter the mindset of business leaders to unlock a whole new, improved way of working. And what follows is outstanding results. We are the originators of Sales & Operations Planning and industry thought leaders for Integrated Business Planning. Our philosophy is based on finding the sweet spot between process, people, and tools to enable business sustainability and success.

What really sets us apart as a business is that each of the Oliver Wight Partners who deliver education to clients, understand that client’s ambitions, challenges, and concerns because they were, themselves, once a client of Oliver Wight. They have all held senior positions in a variety of industries so understand the necessary steps businesses need to take in order to succeed. 

What have been the biggest challenges the supply chain industry has faced over the past 12 months?

Of course it’s easy to talk about the current COVID-19 related challenges and the need to re-evaluate the source of supply etc, but I would say the biggest challenge (and where the biggest opportunity lies) is gaining true end to end visibility and management of the supply chain. 

And what have been the biggest opportunities?

The opportunity could also be seen as a company threat, for example if we don’t take the opportunity to plan and manage the end to end supply chain it is likely that our costs will be higher than those of our competitors. The opportunity is in delivering the lowest cost throughout the entire supply chain – not just for what we own.

What is the biggest priority for the supply chain industry in 2020?

The integration with demand, based on the levels of volatility that we are going to continue to see and being able to run and execute multiple scenarios. 

What are the main trends you are expecting to see in the market in 2020?

I would expect organisations to re-evaluate how they are able to be flexible and agile whilst also understanding how they can adapt their process to fit the current levels of volatility. For example, how to use DDMRP – that was designed for use in a steadier state – to manage increased levels of fluctuating demand.

What technology is going to have the biggest impact on the market this year?

I think that organisations will want to extract data to run business scenarios, plan the end to end supply chain for all partners, and extract data for Integrated Business Planning. So it’s likely that new technology such as 09 or SAP IBP with its other modules will roll to the top.

In 2022 we will all be talking about…?

We will all be discussing the ongoing impact of COVID-19 re. the global recession, and hence we will be talking more about Integrated Business Planning’s capability to effectively plan and manage the integration of strategy and the latest bottom up plans.

Which person in, or associated with, the supply chain industry would you most like to meet?

I am always interested in meeting Supply Chain VPs but in this changing world I would also like to meet the Heads of Digital.

What is the most surprising thing you have learnt about the supply chain sector?

That there are still so many organisations that are average at planning albeit they have all the systems known to man. With this in mind I don’t actually think it’s the tools that are the issue.

You go to the bar at the Total Supply Chain Summit – what is your tipple of choice?

I tend to be a gin and tonic man, but since I work with some big clients in beers, spirits, and soft drinks I do feel I have to support their brands too! 

What is the most exciting thing about your job?

Working with people to realise improved performance that helps to deliver a competitive advantage.

And what is the most challenging?

Typically the most challenging aspect of the job is getting people to change what they have always done so that they can realise the opportunities that exist.

What is the best piece of advice you have ever been given?

Failing is okay providing you learn from your mistakes. 

Take the Supply Chain Briefing Industry Lockdown Survey today!

Here at Supply Chain Briefing we’re looking for the best ways to keep you connected with the industry during these difficult times, so we’ve created a short survey to gauge your views on lockdown working practices and the kind of virtual events you might be interested in attending – it’s all completely anonymous and will take less than two minutes to complete.

To take part, simply start answering the questions below – if you can’t see the questions, just click here to display them in a new browser window.

Thank you in advance for taking part – your answers will help make our content and events even more relevant to your needs.

Create your own user feedback survey

Do you specialise in supply chain Cost reductions? We want to hear from you!

Each month on Supply Chain Briefing we’ll be shining the spotlight on a different part of the logistics market – and in June we’ll be focussing on Cost Reduction Solutions.

It’s all part of our ‘Recommended’ editorial feature, designed to help supply chain industry buyers find the best products and services available today.

So, if you’re a Cost Reduction Solutions specialist and would like to be included as part of this exciting new shop window, we’d love to hear from you – for more info, contact Nick Stannard on n.stannard@forumevents.co.uk.

Here’s our features list in full:

Jun – Cost Reductions
Jul – Supply Chain Software
Aug – Logistics & Operations Management
Sep – Labelling & Packaging
Oct – 3PL & 4PL
Nov – Order Fulfilment
Dec – Transport Planning & Load Optimisation

An update on the Total Supply Chain Summit

We wanted to update you on how we are moving forward with the Total Supply Chain Summit – 21st – 22nd September, Heythrop Park, Oxfordshire.

We have adapted the event layout to ensure we are abiding by the social distancing rule, and therefore ensuring the health, safety and wellbeing of our event attendees and staff.

The event will have controlled numbers, prescheduled meetings and be hosted within a safe environment. 

We have increased the size of our meeting booths to allow for a 2-meter gap, and added a clear partition screen between all meeting participants. Plus, there will be clear floor markings throughout.

This Summit will go ahead either as a live or virtual event. Alongside meetings and networking, you can also enjoy a series of seminar sessions, to ensure you don’t miss out on the latest tips and challenges from leading industry experts.

You can also enjoy complimentary overnight accommodation, including all meals and refreshments throughout.

To secure your place and enjoy all the benefits of the Summit, click here to book your complimentary place.

BIFA offers guidance for business life after lockdown

The British International Freight Association (BIFA) has published a guidance blueprint on the steps businesses should be taking in order to facilitate a return to work once the current lockdown restrictions are eased by the Government.

BIFA says that whilst it was difficult to provide precise answers to the many questions it has received from members because there are numerous variables to consider, it has outlined a series of measures companies should consider.

It says that the safe return of all staff to work must be the primary concern of all employers, but also acknowledges that there may be some preliminary concerns.

The guidance blueprint outlines what should be reviewed, such as cargo handling procedures, the provision of PPE, and a ‘staggered’ start-up of business depending on how premises can function under social distancing and office layouts.

Robert Keen, Director General at BIFA, said: “It is likely that the post-lockdown situation will be an evolving picture and it is important that companies monitor staff feedback and ongoing government advice/regulation to adjust their initial policies and procedures as applicable. Any procedural changes will have to be promptly advised to staff and implementation monitored.

“We obviously wish all our members a successful return to work and will assist wherever we can. Salutary lessons can be learned from recent experiences, and all seem to agree that greater resilience and flexibility will have to be built into business processes, and there will have to be new realities about areas such as credit control procedures and the level of cash reserves held by businesses.”

Click here to read advisory document in full.