I continue to think that the No. 1 challenge to a strong rebound is relates to supply chains and their integrity. I started this rant several months ago and now some of the main stream media are starting to report on this issue. For instance over at WSJ, they ran a article titled, Clarity Is Missing Link In Supply Chain. They state:
The reason is now starting to become clear. The world’s complex “just in time” manufacturing supply chains are making it increasingly tough for Zoran, and any other single link in the chain, to know what’s going on just a few links away… The recession has exposed a harsh side effect of the supply-chain system. Because modern industry rewards suppliers with the leanest inventories and fastest reaction times, when economic crisis struck, tech companies up and down the line contracted as sharply as possible in hopes of being the ones to survive.
Most manufacturing and assembly companies are exposed to this problem, whether they like it or not. And when demand turns upward, the real bumps in the road will be exposed. It’s in the best interest of all related parties in the supply chain to increase lead times and expose their projected needs to the supplier partners. If not, a Without Warning Event will occur, which will cause the supply chain and related partners come tumbling down!
Your thoughts and insights welcomed…
