Supply Chain on the Chopping Block
A poll conducted among finance leaders at The Economist’s recent CFO summit revealed that a two-thirds majority believe supply chain to be a key area to cut costs. An even stronger majority think there are savings to be had in procurement, and will likely be pursuing tighter measures.
It’s not welcome news to a community that’s recently seen itself humbled by natural disasters – and blamed for the fallout with shareholders.
More puzzling still, this management inclination goes against the global trend towards more sophisticated supply chain operations. With the world’s most profitable company a de facto leader in supply chain solutions – Apple’s first post-Jobs CEO is a logistics officer – and greater efficiency on everybody’s lips, this seems like a bad time to cut back.
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Worse, the human and ecological costs of current supply chain methods are becoming clearer and clearer, and re-investment certainly seems like a good idea from the perspective of business leaders who wish to remain so. Cutting back at this critical juncture might yield some short-term gains, but it imperils the industry at large and can drive market instability.
Let’s hope they all just had too much free champagne at the summit.