EBI Consultancy Highlights How Supply Chain Strategies Can Adapt To Economic Changes

SINGAPORE, November 14, 2012

Executive Business Intelligence Consultancy (EBI), a successful provider of high quality commercial, management and supply chain consulting services, explained how supply chain strategies are affected by sudden changes in the global economy and what companies could do to adapt to these changes in a blog post released on November 12, 2012.

EBI cited some examples of how unpredictable changes provoke risks and pressures in the global economy such as the re-election of President Obama in the US and other global changes. They defined the importance of hedging.

As stated in their blog, "One answer is to build hedging directly into your supply chain, which means creating the flexibility to move at least some of your productions in the short or medium term to a country or area that gives you the best supply chain value. Many companies near shore production to be close to consumption; plenty of company offshore everything to low wage economies. This latter strategy causes some companies to chase low wages and weak currencies by shifting production, as we have seen with Adidas moving from China to South East Asia, while at the same time still sourcing raw materials from the supplier base in China. However, moving production is a long term strategy, the success of which is dependent on oil prices, currency fluctuations, local wages and raw materials. Apart from the last element, these are all dependent on the difference or distance between production and consumption; not just now, but in years from now."

"The point of hedging is to spread your product around the world so that you not only spread your risk, but you are also in a position to make short term changes in the percentage of your total output that you build on each of those production centers. As oil increases, you produce more locally; as currencies change, you can shift production quickly as appropriate. How quickly will depend on your product portfolio, companies that practice Agile or Lean manufacturing will be able to react more quickly, but even batch manufactures can react in a few months."

Further, EBI highlighted on the matter on what most companies do in times of uncertainties and how they can classify their products when these times occur . As stated, "Most companies can stratify their products into high/low value, high/low volume; the ability to near shore high value, low volume product and offshore the rest would be obvious. The skill would come from how quickly you could shift production of some of the products between plant to hedge against uncertainty would become the differentiator."

About EBI Consultancy

EBI Consultancy provides high quality management and supply chain consulting services that ensure the best outcomes for business and help companies increase their shareholder value. Since 2009, EBI Consultancy has assisted clients throughout Asia Pacific, Europe and the Middle East. EBI has also formed alliances with a select number of niche consultancies such as March Associates, Actccent and TMCS. For more information, visit http://www.ebic.co