New study says SMEs are shifting supply chain strategies

One of the key results of a study done by Global consultancy IDC Manufacturing Insights is that manufacturers, while pressured to reduce costs, have pulled back on the prevalence of low-cost country sourcing.

The worldwide study of over 700 small and medium-sized enterprises (SMEs) in the manufacturing industry was done on behalf of Infor and IBM.

According to researchers, there seems to be an increased focus on the importance of customer fulfillment in contrast with a previous emphasis on low-cost sourcing strategies.

The consultancy asserted that low-cost sourcing could result in lower responsiveness and poor customer service, higher costs, and additional risk factors such as supply chain disruptions, diminished IP protection and environmental concerns. The study indicated that North American and European manufacturers would focus on improving their own operations for the medium-term as opposed to aggressively looking to sourcing partners to cut costs.

This made gaining control over the "customer experience" very challenging.

According to IDC spokesmen, the results of the study perhaps should be seen as an opportunity for companies involved in global logistics services "rather than the more obvious threat implicit in the findings."

"The challenge for logistics and transportation companies will be to provide SMEs with the reliability and visibility which they clearly lack and which is hindering their adoption of global sourcing strategies," said spokesmen.

Furthermore, added IDC, the study suggests that a greater focus on the needs of smaller businesses could pay dividends for logistics companies.

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