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Consumer Goods Companies, Retailers Seen Failing to Address Global Supply Chain Risk
66 percent rely on physically visiting factories to benchmark suppliers and manage risk; many still rely on fax, e-mail and phone to transact with suppliers, TradeCard survey shows
New York — September 5, 2008 — Consumer goods companies and retailers are surprisingly placing very little emphasis on proactively monitoring supply chain risk, according to a new survey report released by solution provider TradeCard.
The survey examines the level of supply chain automation in place at retail and consumer goods companies to collaborate with trade partners, ensure compliance and handle risk. According to the report, 66 percent of companies in the consumer goods and retail space rely on physically visiting factories to benchmark suppliers and trade partners, and manage risk; and they rely on fax, e-mail and phone to transact with suppliers.
The report shows 60 percent of those surveyed identified strategic programs, such as private labels, direct shipments and postponement, as high priority company goals and initiatives. However, the study indicates that many have not put technology in place to support efficient execution of these strategies, exposing risk onto themselves in various forms.
"Many companies today still rely on slow manual processes that offer only limited visibility," said Esther Lutz, vice president of business development at TradeCard and author of the report. "This lack of visibility leaves them exposed to risk when events requiring rapid change occur. Our study shows most companies are taking a reactive approach to risk, as opposed to a proactive approach that could help minimize the impact of disruption and protect bottom line results early in the cycle."
The report can be downloaded (registration required) at www.tradecard.com/supplychainriskreport.
Lutz added that as companies initiate new overseas sourcing programs, they face a number of barriers and heightened complexity. "Currencies, customs and time zones are just a few forms of risk to be addressed," she said." Increased complexity of transactions requires companies to change the way they view and assess supply chain risk. A holistic approach that includes all supply chain parties involved in the process and identifies potential weak points can protect the bottom line."
The survey examines the level of supply chain automation in place at retail and consumer goods companies to collaborate with trade partners, ensure compliance and handle risk. According to the report, 66 percent of companies in the consumer goods and retail space rely on physically visiting factories to benchmark suppliers and trade partners, and manage risk; and they rely on fax, e-mail and phone to transact with suppliers.
The report shows 60 percent of those surveyed identified strategic programs, such as private labels, direct shipments and postponement, as high priority company goals and initiatives. However, the study indicates that many have not put technology in place to support efficient execution of these strategies, exposing risk onto themselves in various forms.
"Many companies today still rely on slow manual processes that offer only limited visibility," said Esther Lutz, vice president of business development at TradeCard and author of the report. "This lack of visibility leaves them exposed to risk when events requiring rapid change occur. Our study shows most companies are taking a reactive approach to risk, as opposed to a proactive approach that could help minimize the impact of disruption and protect bottom line results early in the cycle."
The report can be downloaded (registration required) at www.tradecard.com/supplychainriskreport.
Lutz added that as companies initiate new overseas sourcing programs, they face a number of barriers and heightened complexity. "Currencies, customs and time zones are just a few forms of risk to be addressed," she said." Increased complexity of transactions requires companies to change the way they view and assess supply chain risk. A holistic approach that includes all supply chain parties involved in the process and identifies potential weak points can protect the bottom line."
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