JDA Outlines Considerations for Leveraging Supply Chain Segmentation to Balance Global Production Strategies and Enhance Profitability

More than a decade after many manufacturing companies started moving their production operations to lower-cost countries, the industry is again on the brink of a major global shift. Many of the offshore cost advantages that once existed are beginning to erode. Wage inflation, rising oil prices – even natural disasters – are among the factors affecting offshore supply chain profitability. “Many manufacturers underestimated the offshore impacts of long lead times and high inventory costs,” said David Johnston, senior vice president, supply chain, JDA Software. “They are now discovering that maintaining service levels, in addition to the inventory and logistics buffering costs necessary to support the long-distance supply chain, far outweigh any labor cost advantages. In addition to higher than anticipated overall product costs, offshore production also introduces a latency lag in bringing new products to market and responding to market trends.” To help manufacturers address fluctuating global cost structures and pinpoint the best production strategy for reliable, profitable customer service, JDA® Software Group, Inc.

, The Supply Chain Company®, recommends leveraging supply chain segmentation to strike the right sourcing balance and create effective supply chain strategies.