SUPPLY CHAIN SOLUTIONS
WAREHOUSING, HANDLING & STORAGE
MANUFACTURERS URGED TO BOLSTER INVENTORIES AS SUPPLY CHAIN DISRUPTION MOUNTS
Latest global supply chain resilience report indicates further decline is expected, with purchasing teams challenged to mitigate a growing number of risks
M
anufacturers across a variety of sectors are being urged to consider fattening their inventories as quickly as possible in order to mitigate a prolonged disruption to global supply chains.
The advice comes from supply chain risk and performance management specialist, Achilles, whose latest report on the resilience of global supply chains, indicates high risks are evident across almost all sectors and geographies. The Q2 Achilles Supply Chain Resilience Index (ASCRI) now indicates a score of 39.8 – the first time the figure has fallen below its 40-point high-risk threshold, with further declines in resilience expected.
Anticipation of a protracted war in Ukraine and the re-emergence of COVID-19 in China bringing about further logistical challenges have led to a desperate need for procurement professionals to mitigate the potential impact of supply losses over the months to come. Where possible, bringing the next order forward can help manufacturers to potentially afford themselves one extra stock cycle and the time to find alternatives if supply is lost. While many will be concerned about the cost of an extra stock cycle in the short term, the cost premium is still expected to be less than that caused by large-scale stockouts. Katie Tamblin, Chief Product Officer at Achilles, said:
“Procurement professionals work tirelessly to plan contingencies should supply chain disruption arise, but what happens when there are so many risks that some become unavoidable? “With the prolonged conflict in Ukraine and extremely tight restrictions on movement in China at present, the prospect of further disruption and even higher costs seem almost inevitable. “It would be wise for manufacturers to consider acting now to mitigate even greater risks months down the line. By bringing planned orders forward as much as possible, that extra stock cycle and the extra planning time it brings, could prove to be an invaluable way to find alternative sources of supply.”
The ASCRI is a time series index measuring changes in supply chain risk. The index measures underlying supply chain risk by country across six categories: Economic, Environmental, Labour Practices, Legal and Governance, Resilience, and Safety and Security. Each country’s score is derived by combining the Achilles’ Scores of suppliers based in the country with that country’s overall performance in those six categories. This framework is then supplemented by a range of global measures, including shipping and sentiment data. The Q2 Report uses data from January to March 2022.
Moeco
www.moeco.io KEY FINDINGS
• Further reduction in supply chain resilience score to 39.8 in Q1 2022
• ASCR Index has now fallen under the 40-point high- risk threshold, with further decline expected
• Damage to Ukrainian manufacturing bases and extended sanctions on Russia expected to prolong stifled trade flows from Europe
• Risks to supply of critical commodities such as oil starting to compound each other in an ‘inflationary feedback loop’
• Economic growth is being undermined by a jump in inflation
40 SEPTEMBER 2022 | FACTORY&HANDLINGSOLUTIONS
39
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58
