Flexibility is key for supply chains, says report

The main challenges facing supply chains today are managing external factors, such as the global economic crisis, and addressing green issues, according to a report from AMR Research in collaboration with RedPrairie.

“Transportation Management: Lessons from a Difficult Two Years” indicates there are three key external events that have affected transport in the consumer products, food & drink and chemical manufacturing sectors of late: oil price volatility, the recession and natural disasters, such as Hurricane Katrina and the Icelandic volcano.

The report suggests that consumer product manufacturers and the food & drink industry need to develop more sophisticated and flexible transport systems to reduce risk in future, particularly as supply chains are becoming increasingly complex.

However, it points out that the chemical sector already appears to have established systems which can cope with re-routing due to “its history of dealing with natural disasters”.

Additionally, the report found there is growing pressure on companies to adopt more sustainable and eco-friendly transport systems.

In fact, 86 per cent of companies have already made some plans to tackle sustainability. The top three actions taken to improve transport strategy were: consolidating orders for full truck loads, collaborative planning with vendors for inbound freight and centralising to a load control centre.

Martin Hiscox, president and managing director international, RedPrairie, said: “Companies are increasingly dealing with a wide range of challenges, some of which can be outside their immediate control. The report highlights the need to continually develop strategic and tactical supply chain solutions to meet a constantly changing world.”

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Credit: Supply Chain Standard.com