Global supply chains could struggle in 2013

on Wednesday, December 19, 2012

Global supply chains could struggle in 2013Global supply chains often depend on the health of the economy, which can make it difficult for companies to have cost-effective, efficient operations. As the economy is slow to recover, global supply chains could face a variety of struggles, according to a recently released report from commercial information provider Dun & Bradstreet (D&B).

"Recovering from the Great Recession of 2008 continues to challenge global economies," said Paul Ballew, chief economist at D&B. "Against that backdrop, the speeds at which companies are shifting business operations, as they continue to restructure, create more efficiency and adaptability to better anticipate future economic conditions. In fact, according to our statistics, business financial health today tops pre-recession levels. Unfortunately these business gains are inhibited by social and political pressures at home and abroad, underscoring the interdependency of today's global economy."

Worldwide problems could impact supply chains
Businesses will face challenges in the coming year, according to a year-end report from D&B. While the U.S. economy has shown signs of improvement in recent months, its slow growth and large public sector debt could cause businesses there to falter.

As businesses in Europe deal with a currency crisis and the problems with multiple Eurozone countries, 2013 could be ominous. Uncertainty surrounds companies doing business in the area, and a currency collapse could have an enormous impact on supply chains in that region of the world. High unemployment rates could slow demand for goods, decreasing production, the need for raw materials and changing logistical operations.

Global growth is also a concern for companies that have worldwide supply chains. According to the D&B report, the situation in Europe has put pressure on China, once an economy growing at a rapid pace. With decreasing demand for its cheaply manufactured goods and uncertainty in its own economy, financial problems in China could escalate and have a negative impact on other nations.

Working around global concerns
"While significant concerns remain across every global economic region, 2012 proved to be a year in which businesses continued to adapt to the realities of a sluggish and prolonged recovery," said Ballew. "This should serve them well as they navigate the challenges and risks associated with 2013 and beyond."

Companies concerned about the impact of global markets on their supply chains may be eager to employ cost savings techniques, such as strategic sourcing or green initiatives that will cut energy expenses. Having a firm handle on supply chain management is also essential to keeping an organization's operations successful.

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