APICS is the premier professional association for supply chain management.

Investing in Supply Chains

by APICS CEO Abe Eshkenazi CSCP, CPA, CAE |   2013 | 0 | 0

The headline is attention-getting__“US Competitiveness Hinges on the Strength of Small Business Suppliers”__but the first paragraph speaks volumes more. In the May 6 edition of the Washington Post, Karen Mills, the administrator of the US Small Business Administration, writes, “Talk to the CEO of any major corporation about their global competitiveness and the conversation will almost always turn to their supply chains. They will tell you that a strong, nimble supply chain helps fuel innovation, creates efficiencies, and strengthens operations.”

Mills cites Caterpillar, GE, and Ford as companies that are moving some of their manufacturing back to the United States. The reasons are the same as those named by GE CEO Jeff Immelt in a 2012 Harvard Business Review article: “Engineering and manufacturing are hands-on and iterative, and our most innovative appliance design work is done in the United States. At a time when speed to market is everything, separating design and development from manufacturing didn’t make sense.”

In her article, Mills talks about how investment in US small business is a result of high worker productivity, rising labor and energy costs, and logistical advantages of closer supplier networks. While this investment may bring some jobs back to the United States, it also helps firms better support global manufacturing. In fact, she writes, some foreign companies, such as Lenovo, Ikea, Nissan, Airbus, and Siemens, are investing in US operations and US suppliers.

“Today, US-based, forward-thinking companies are looking at their supply chains very differently,” Mills writes. “They are working together to co-innovate, they are helping supply the capital and skills their small suppliers need, and they are operating as partners.”

This trend, Mills proposes, actually helps US companies better contribute to the global marketplace. She, again, echoes sentiments originally expressed by Immelt. “This doesn’t mean that we are simply reversing what we have done and retreating from performing R&D and manufacturing outside the US,” Immelt wrote. “The fact is that we are__forevermore__going to play in a global economy, where competition is tougher, customers are more demanding, and the pace of change is faster. To win, we must play and we must improve everywhere we do business.”

Small, yet mighty

In her article, Mills highlights the benefits small suppliers bring to the overall manufacturing landscape, key among them agility. From a supply chain professional employee perspective, we know most large corporation leaders consider these staff a competitive advantage. Now, as supply chain complexities increase along with the opportunities, small- and medium-sized business leaders also must consider investing in their supply chain teams.

By contrast, the latest APICS Operations Management Employment Outlook shows that for the first time since the survey’s inception, respondents expect hiring to go down.

Experts and political leaders alike recognize that supply chains fuel innovation, create efficiencies, and strengthen operations. In these uncertain economic times, those benefits aren’t optional. Now is the time to invest in your company’s supply chain by hiring APICS Certified Supply Chain Professionals (CSCPs) or supporting existing employees as they earn their APICS CSCP designations. Visit apics.org to get started.

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