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No. 1 Supply Chain Challenge: Demand Volatility

No. 1 Supply Chain Challenge: Demand Volatility

December 8, 2010

There's still a sense of hesitation in conversation about whether the recession is over. At a conference I attended last month, one consultant was a bit more emphatic: "The recession's over? Not according to the distributors I work with."

But even if the numbers aren't there yet, there seem to be other signs that recovery is indeed underway. McKinsey & Co. recently released the results from its Global Survey, and those results demonstrate a shift in mindset among respondents with regard to challenges in the supply chain.

For example, companies identified "increasing volatility of customer demand" as the No. 1 supply chain challenge over the past five years. Yet when asked about expectations for the next five years, that challenge doesn't crack the top 5.

Instead, the No. 1 expected challenge among respondents to the survey was "increasing pressure from global competition," followed by "increasing expectations about customer service/product quality" and "increasingly complex patterns of customer demand."

While economic recovery may be occurring more slowly than many people would like, the survey results suggest "companies anticipate returning to a new normal, wherein they can focus on issues other than cost at least some of the time."

Click here to read the full results at mckinseyquarterly.com.

Click here to access articles about the economy from MDM.

Order Now: MDM's 2011 Economic Forecast

Related article: The Rush to Meet Growing Demand

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