Supply chain will hold, say buyers

2 August 2010

3 August 2010 | Lindsay Clark

A total of 54 per cent of procurement managers and experts in the SM100 poll believe supply chains can keep up with demand as the economy recovers. This comes despite Nissan’s problems this month with supplier delays.

Gary Moore, procurement performance manager at BAE Systems Insyte, said that if buyers work closely with the supply chain they should be able to cope with rising demand. “This means both parties co-operating on sharing intelligence regarding our expected needs going forward and on their future load against that estimated profile.”

Shaun Evans, procurement operations and relationship manager at Co-operative Financial Services, said:  “If we manage and maintain dialogue effectively with our supply chain through several tiers, communicating demand forecasts as far out as possible, then there is no reason why our supply chain should be caught out by anything other than a sudden and unpredictable spike in demand.”

Not all respondents were so optimistic, however. Thirty-seven per cent said the economic upswing would cause supply chain problems.

“Some suppliers have downsized to reduce costs and capital and now there is growth they are struggling to meet our full needs. This is leading in some cases to reductions in performance against the service levels we and our customers expect and have contractually agreed,” said Neil Dixon procurement manager at LeasePlan UK. “We have endeavoured to mitigate this by having an increased supply base, but issues are still occurring.”

In July, Nissan had to halt production at three factories in Japan because of a delay in the supply of electronic parts.

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