TAKEAWAYS
• Top operational concerns when trying to fulfill contracts include: • Rising costs (46%) • Product issues from suppliers struggling to meet demand (43%) • Logistical challenges when implementing new supply chains or contingency planning approaches (43%) Survey respondents report turning to four key approaches to mitigate these issues: 1. Strengthening existing relationships. 83% of manufacturers are investing in their existing supplier relationships as part of their overall supply chain investments. 2. Diversification of supply chains. 81% of manufacturing executives are also working to engage multiple suppliers. However, they still struggle to implement regional diversification of suppliers, citing cost as the primary concern. 3. Implementing digital solutions. 78% say using digital solutions and/or monitoring tools enhances visibility and transparency through the supply network, and 76% plan to do so. However, 88% report concerns about legal, financial, privacy, IP theft or cybersecurity due to digitized supply chain ecosystems. 4. Returning to a just-in-case inventory approach. 65% of manufacturing executives are shifting from a just-in-time approach that capitalizes on lean inventory investment to a just-in-case approach to mitigate any upcoming issues. CHALLENGES THAT HAD THE BIGGEST IMPACT ON MANUFACTURERS’ SUPPLY CHAINS IN THE PAST 11-18 MONTHS
Supply chain disruptions over the past 12-18 months—including shipping delays and parts shortages due to truck driver issues and congested ports—have heavily impacted manufacturers ( see chart, right ). That’s the consensus of Deloitte’s new study, Meeting the Challenge of Supply Chain Disruption , which was conducted in partnership with Manufacturers Alliance. MANUFACTURERS FEEL THE DISRUPTION BURDEN TOP OPERATIONAL CHALLENGES
Rise in shipping cost
46%
Product issues from suppliers who are struggling to meet demand
43%
Logistical challenges while implementing a new supply chain mode or contingency planning
43%
Continued shortage of critical parts
41%
Cost challenges while implementing a new supply chain mode or contingency planning
40%
Limited availability of suppliers to form new relationships with
59%
Shipping delays
40%
Inability to fulfill ongoing contracts
31%
56%
Part shortages
Excess or obsolete inventory due to inaccurate forecasting
31%
56%
Transportation delays
Limited ability to diversify suppliers
30%
53%
Talent shortage
Uncertainty in consumer demand
27%
50%
Restricted supplier network
Source: Deloitte analysis of 2022 manufacturing supply chain study data
The study surveyed more than 200 U.S.-based manufacturing executives to examine how traditional manufacturing supply chains are evolving to balance costs, efficiency, and resilience. Findings include: • 80% of respondents have experienced a heavy supply chain disruption in the previous 12-18 months.
46%
Cyber risk failure
41%
Supplier bankruptcy
Excess inventory
41%
Source: Deloitte analysis of 2022 manufacturing supply chain study data
November 2022 • Inbound Logistics 19
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