Unpredictable demand, fuel price volatility among issues supply chains face: study

by Robert Robertson

At the 24th Annual Conference on Transportation and Cost Savings held at Toronto’s Allstream Centre on Sept. 23, more than 200 attendees learned how to better manage their supply chains.

Dr. Mary Holcomb.

The event brought together manufacturers, carriers, customs brokers, freight forwarders and software providers.

Dr. Mary Holcomb, associate professor of logistics at the University of Tennessee, outlined results from the Drivers of Enduring Supply Chain Management Practice study, which is a culmination of the 18th and 19th annual summary of logistics and transportation issues researched by the University of Tennessee and Georgia Southern University.

A total of 802 respondents across 14 different industry sectors participated in the current study. The sample represents more than US$36 billion in transportation expenditures.

This is approximately 5.2 percent of the total US surface transportation expenditure.

Study outlines key issues

Key issues for study respondents are unpredictable demand, fuel price volatility, excessive supply chain inventory, increased customer demand with respect to price and/or service, and commodity price changes.

"Every year, we try to develop a theme behind what is really a lot of data. Depending on company size, we have found there are differences in logistics and supply chain management practices," said Holcomb. "Across every size of firm unpredictable demand is the biggest issue and challenge that respondents face.

"The economy has levelled the playing field for companies and their supply chains. We’ve been seeing a relentless focus on reducing costs, and we don’t see this trend going away. We also continue to find that companies need to understand leading supply chain practices. This includes optimization, profitability, adaptability, velocity and synchronization."

According to Holcomb, not enough sufficient progress is being made in building seamless, end-to-end supply chains.

"Managing transportation and distribution is becoming more complex," she said. "This is being addressed by the increased use of more sophisticated tools and techniques on the domestic side."