Supply Management

While the goal of global sourcing and using outsourced manufacturing is to lower manufacturing costs, the increased complexity that comes from leveraging internal and external manufacturers brings significant challenges. Chief among these are the obstacles to managing visibility and control, obstacles that can negate financial benefits. For instance, when quality issues arise, the disconnected and far-flung nature of third-party manufacturing makes them hard to detect.

After the Thanksgiving holiday in the US, a co-worker in Florida commented that her grocery store was restricting cream cheese purchases, creating a buzz and taking national airtime during the Christmas season. Yet another mentioned the lack of King’s Hawaiian rolls at his store. Supply chain pressures have caused inflationary pricing for everything all around the globe in the last 12 months and food and beverage prices have now increased exponentially.