Risk management takes on new meaning for supply chain managers doing business overseas during a global recession. This according to key logistics analysts
Sourcing from low-wage countries like China seemed like such a logical idea before the world’s economy went south, said C.J. Wehlage, research director, AMR Research, who is seen here on the right. But with demand continuing to slacken, logistics decision-makers are now more concerned with maintaining the integrity of their pipeline.
C.J. Wehlage said, ‘The failure of some suppliers in China has become an issue. And having the low-wage option is not such an advantage if quality and reliability suffer.’
Wehlage was among the featured speakers at this week’s ‘High-Tech Forecasting & Planning Summit,’ organized by the London-based IE Group. His presentation mirrored a study done by AMR Research last year,finding that volatile fuel, energy, and commodity prices rank highest in areas of global risk.
That study concluded China is the region that contributes the most risk to global supply chains.
Logistics Management reported that Keith Baranowski, vice president, SAP America, said that ‘demand management’ was back in vogue with high-tech executives.
‘We work in a different ‘eco-system,’’ he said, ‘where reporting and analytics become far more sensitive. As a consequence, the focus has been on cost, and removing risk from the equation.’
But taking out too much risk can be a problem, too, said Baranowski, especially if it means losing talented members of your workforce.