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ISM Survey Reflects Our Reader’s Concerns

According to ISM, supply chain managers say their firms embrace re-shoring, face cyber attacks, and view tax policy and European stability as “corporate threats.”
By Patrick Burnson, Executive Editor
May 03, 2013

A significant percentage of supply-chain professionals surveyed during ISM’s 98th Annual International Supply Management Conference in Dallas this week expressed many of the same concerns we have addressed recently.

According to ISM, supply chain managers say their firms embrace re-shoring, face cyber attacks, and view tax policy and European stability as “corporate threats.”

More than 2,000 professionals attended the Institute for Supply Management’s conference and several instant digital polls were held throughout the three-day period.

Re-Shoring Trends Significant

A total of 575 attendees responded to the question, “Over the next year do you expect to re-shore any of your sourcing?” Nearly 30 percent of respondents indicated they were “likely” or “very likely” to re-shore. Just over 37 percent responded that they were “not likely” or “not at all likely.” (33% didn’t know or were
not sure.)

The number of “likely” or “very likely” responses is significant, said ISM CEO Thomas W. Derry, because there seems to be a trend of attendees seeing more advantages to keeping work within their own country. If that is the case, it could have a significant impact on U.S. businesses.

“The move to re-shoring is largely resulting from the risks that companies were exposed to in Japan and Thailand from natural disasters,” Derry said. “Combine this with increasing freight rates and increased levels of inventory, companies are re-evaluating the approach. Many want to have inventory close to the point of manufacture - even if it means duplicating resources to do it.”
In response to a second related polling question, “What issues raise concern about low-cost country sourcing abroad?”, the top two choices were “instability and changing economies,” at 38 percent, and “long distances and lead times” at 36 percent. Environmental or sustainability issues came in at 13 percent.

Cyber Attacks & Defensive Action

ISM Conference attendees were asked the question, “How has your supply management organization responded to cyber attacks over the past 12 months?” One out of six (17 percent) answered that they had responded to direct attacks on their systems over the past twelve months. Another 23 percent said they had taken “strong and visible precautions” against cyber attacks. Thirty percent of respondents answered that they had taken possible precautions “behind the scenes.”

SCMR subscribers may wish to have a look at our next “Global Links” column for more on this “scene stealing” issue.

President Barack Obama has declared that the, “cyber threat is one of the most serious economic and national security challenges we face as a nation,” said ISM Senior Vice President Bill Michels. “Our customers are recognizing that considerable investment is required as a major supply chain risk strategy.”

“Particularly, we see a significant investment in the financial and business-to-consumer sectors,” Michels added. “Most companies are reluctant to speak about their activities in cyber security risk mitigation for
fear of becoming a target.”

Taxes & European Stability Seen as Biggest Business Threats

In answer to the survey question, “What is the most likely threat your business will face in the next 12 months?” the top two responses were “higher individual or corporate taxes” at 38 percent, and “European economic collapse” at 30 percent. “Weakness in the Chinese economy” was third at 12 percent. (Survey size: 145 respondents.)

In response to a related question, 52 percent of the supply managers said the budget battles in Washington had hurt their businesses.
The interactive polls were conducted live, during general sessions at the ISM Conference held April 28-30 in Dallas, using a mobile phone application that allowed attendees to vote by sending a text message, using an app, or visiting a mobile web site.

Visit http://www.ism.ws to learn more about the 2013 ISM Conference where video clips of the conference are available as are results from ThumbTalk polls.

 

 


About the Author

image
Patrick Burnson
Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).

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