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Others that already source on a global basis must learn to cope with uncertainties and supply or price disruptions on an unprecedented scale.
Instead of simply monitoring current developments, management must learn to make things happen to its own advantage.
Dow Chemical, BASF, and Du Pont have all reduced their supply vulnerability through backward integration in response to long-term considerations.
By assessing the company’s situation in terms of these two variables, top management and senior purchasing executives can determine the type of supply strategy the company needs both to exploit its purchasing power vis-à-vis important suppliers and to reduce its risks to an acceptable minimum.
Attractive new options, or serious vulnerabilities, or both, may come to light as the assessment explores questions like these: 1.
Some companies have already responded to the growing pressures.
For example: To ensure long-term availability of critical materials and components at competitive cost, a host of manufacturers will have to come to grips with the risks and complexities of global sourcing.
Search for updating existing networks in bottleneck companies:
To minimize their supply vulnerabilities and make the most of their potential buying power, a number of European companies have successfully used a four-stage approach to devise strategies.