Managing a supply chain is a risky business and the longer the supply chain the riskier it gets. According to a new report from analysts Aberdeen Group entitled ‘Supply Chain Risk Management – building a resilient global supply chain’, over the past year, 58 per cent of companies have suffered financial losses as a result of supply chain disruptions.
Some of the key areas of concern are logistics congestion and capacity, risk profile of suppliers, fuel prices and the risk profile of a country. A very high percentage of companies (99 per cent) in the study group reported supply chain disruption in the last twelve months, but not all companies suffer to the same extent and it really comes down to how a company prepares and responds to disruption – being pro-active, rather than reactive is essential.
Agility in responding to a disruption to supply can only be achieved if the right processes are already in place. A company that can quickly identify when a problem occurs and has planned for an appropriate response is more likely to limit the damage caused by the disruption.
So, working closely with supply chain partners could be the difference between success and financial disaster.Correction
Volvo currently has ten local delivery centres (LDCs) in the UK and not as reported in Supply Chain Standard, September 2008, page 62. There are five in the South operated by DHL and five in the North operated by CAT Logistics.
Inventory levels at the dealerships are actually lower than pre-LDC as they now carry a minimum stock of around 250 lines compared to pre-LDC levels of 5,000-7,000 lines.