Manufacturers Feel the Disruption Burden

Manufacturers Feel the Disruption Burden

Supply chain disruptions over the past 12-18 months—including shipping delays and parts shortages due to truck driver issues and congested ports—have heavily impacted manufacturers (see chart). That’s the consensus of Deloitte’s new study, Meeting the Challenge of Supply Chain Disruption, which was conducted in partnership with Manufacturers Alliance. (see chart). That’s the consensus of Deloitte’s new study, Meeting the Challenge of Supply Chain Disruption, which was conducted in partnership with Manufacturers Alliance.

The study surveyed more than 200 U.S.-based manufacturing executives to examine how traditional manufacturing supply chains are evolving to balance costs, efficiency, and resilience.

Findings include:

  • 80% of respondents have experienced a heavy supply chain disruption in the previous 12-18 months.
  • Top operational concerns when trying to fulfill contracts include:
    • Rising costs (46%)
    • Product issues from suppliers struggling to meet demand (43%)
    • Logistical challenges when implementing new supply chains or contingency planning approaches (43%)

Survey respondents report turning to four key approaches to mitigate these issues:

1. Strengthening existing relationships. 83% of manufacturers are investing in their existing supplier relationships as part of their overall supply chain investments.

2. Diversification of supply chains. 81% of manufacturing executives are also working to engage multiple suppliers. However, they still struggle to implement regional diversification of suppliers, citing cost as the primary concern.

3. Implementing digital solutions. 78% say using digital solutions and/or monitoring tools enhances visibility and transparency through the supply network, and 76% plan to do so. However, 88% report concerns about legal, financial, privacy, IP theft or cybersecurity due to digitized supply chain ecosystems.

4. Returning to a just-in-case inventory approach. 65% of manufacturing executives are shifting from a just-in-time approach that capitalizes on lean inventory investment to a just-in-case approach to mitigate any upcoming issues.