Companies Shifting Supply Chains in Response to Global Uncertainty – Proformative

More companies are bringing production back in-house due to the increasing volatility in global supply chains. A survey by manufacturers’ organization EEF found that 40 percent of companies have shifted manufacturing in-house in recent years.

The recession has caused a number of problems in securing necessary materials, as 82 percent of surveyed firms noted that their supply chains had seen disruptions. To lower their risk, companies are exploring more possibilities to shorten their supply lines. Along with the in-house production, 25 percent of businesses have increased the use of local suppliers.

“In recent years manufacturers have been hit by a host of unforeseen events, which has seriously tested their supply chain monitoring and business continuity planning,”  EEF chief economist Lee Hopley said. “This can also create opportunities to re-shore production and rebuild key manufacturing with companies bringing some production in-house and using local supply chains.”

The increased collaboration that can be found through local suppliers has extended to better inventory management. Firms are also continuing to invest in technology to monitor inventory. However, tracking inventory is an area that could see a lot of improvement in the coming years. Only 11 percent of respondents stated they monitored the entire supply chain, despite the potential risks.