Significant trends in supply chain area

Filed in archive Market Overview on November 27, 2006

These are some important trends in supply chain area based on Economic Development Future Journal. I thought it might be interesting for you:

Offshoring of Manufacturing - Customers are increasingly moving electronic equipment production to Asia. This has led many companies in the industry to move their manufacturing base to countries such as Taiwan and China. Some have moved to Eastern Europe as well. Companies like Emerson and Avnet have expanded into Asia to take advantage of lowered costs and capitalize on the increased local demand for electronics.

Restructuring - Most companies are restructuring their operations to meet the requirements of the changing composition of the end market which is driving demand in newer segments such as aerospace, Medical equipment and telecommunications. One example is Thermo Electrons which has been divesting its business units as a part of its restructuring program.

Supply Chain Optimization - Companies are increasingly focusing on supply chain optimization in an endeavor to maintain a steady flow of components to manufacturing operations. When supply chains are optimized, efficiency is gained because manufacturers are not forced to delay production because a certain component is missing. By the same token, the amount of components that remain ultimately unused is reduced, thereby having a positive impact on costs.