It's a good thing for companies to reexamine their supply chains periodically. Usually it's a voluntary exercise, but Carestream Health didn't have much choice: As described in the article on Page 72 of this issue, the medical imaging company was forced to take a fresh look at its supply chain after it was sold by its parent company, Kodak. Carestream Health used supply chain network analysis software to verify that it had made the right decisions about the locations of its distribution centers. As the story notes, Carestream plans to make it a standard practice to regularly re-examine the makeup of its supply chain.
Given today's dynamic business environment, it's important for companies of all types to do the same. Among the factors they need to consider are the number and locations of manufacturing plants and distribution centers required to serve customers and markets around the world. The emergence of software programs for network design and inventory optimization, which contain mathematical algorithms that compare variables to devise a solution, makes it much easier to conduct this type of analysis.
Supply chain network reviews are valuable at any time, but it's especially important to conduct them now, in the midst of a recession. That's because the global economic downturn is providing a temporary reprieve from high energy prices and an opportunity to plan for the future.
That is why I'm suggesting that you take advantage of this period of depressed oil prices to model and evaluate your current supply chain networks. Consider developing and testing various scenarios to determine the optimal manufacturing and warehousing locations for serving your customers while you are not under pressure from record-high oil prices. After all, it takes time to select a new contract manufacturer, shut down a plant, or reposition a warehouse.
At this writing, the price of a barrel of oil has fallen by more than half from its near-$150 high of a few months ago. As supply chain professionals know from firsthand experience, high oil prices drive up the cost of both manufacturing and distribution, making it necessary to optimize supply chains for efficiency.
Even though companies typically cut back and retrench during recessions, now is not the time to put aside planning for tomorrow. Because as soon as the economy comes roaring back to life—and eventually it will—the price of oil will resume its steep upward climb and may even surpass 2008's lofty levels. Supply chain managers who think ahead and prepare now will not be caught off-guard, and they'll be ready to reconfigure their supply chains when energy costs become an even bigger concern than they are now.
Business software vendor Cleo has acquired DataTrans Solutions, a cloud-based procurement automation and EDI solutions provider, saying the move enhances Cleo’s supply chain orchestration with new procurement automation capabilities.
According to Chicago-based Cleo, the acquisition comes as companies increasingly look to digitalize their procurement processes, instead of relying on inefficient and expensive manual approaches.
By buying Texas-based DataTrans, Cleo said it will gain an expanded ability to help businesses streamline procurement, optimize working capital, and strengthen supplier relationships. Specifically, by integrating DTS’s procurement automation capabilities, Cleo will be able to provide businesses with solutions including: a supplier EDI & testing portal; web EDI & PDF digitization; and supplier scorecarding & performance tracking.
“Cleo’s vision is to deliver true supply chain orchestration by bridging the gap between planning and execution,” Cleo President and CEO Mahesh Rajasekharan said in a release. “With DTS’s technology embedded into CIC, we’re empowering procurement teams to reduce costs, improve efficiency, and minimize supply chain risks—all through automation.”
And many of them will have a budget to do it, since 51% of supply chain professionals with existing innovation budgets saw an increase earmarked for 2025, suggesting an even greater emphasis on investing in new technologies to meet rising demand, Kenco said in its “2025 Supply Chain Innovation” survey.
One of the biggest targets for innovation spending will artificial intelligence, as supply chain leaders look to use AI to automate time-consuming tasks. The survey showed that 41% are making AI a key part of their innovation strategy, with a third already leveraging it for data visibility, 29% for quality control, and 26% for labor optimization.
Still, lingering concerns around how to effectively and securely implement AI are leading some companies to sidestep the technology altogether. More than a third – 35% – said they’re largely prevented from using AI because of company policy, leaving an opportunity to streamline operations on the table.
“Avoiding AI entirely is no longer an option. Implementing it strategically can give supply chain-focused companies a serious competitive advantage,” Kristi Montgomery, Vice President, Innovation, Research & Development at Kenco, said in a release. “Now’s the time for organizations to explore and experiment with the tech, especially for automating data-heavy operations such as demand planning, shipping, and receiving to optimize your operations and unlock true efficiency.”
Among the survey’s other top findings:
there was essentially three-way tie for which physical automation tools professionals are looking to adopt in the coming year: robotics (43%), sensors and automatic identification (40%), and 3D printing (40%).
professionals tend to select a proven developer for providing supply chain innovation, but many also pick start-ups. Forty-five percent said they work with a mix of new and established developers, compared to 39% who work with established technologies only.
there’s room to grow in partnering with 3PLs for innovation: only 13% said their 3PL identified a need for innovation, and just 8% partnered with a 3PL to bring a technology to life.
Even as a last-minute deal today appeared to delay the tariff on Mexico, that deal is set to last only one month, and tariffs on the other two countries are still set to go into effect at midnight tonight.
Once new U.S. tariffs go into effect, those other countries are widely expected to respond with retaliatory tariffs of their own on U.S. exports, that would reduce demand for U.S. and manufacturing goods. In the context of that unpredictable business landscape, many U.S. business groups have been pressuring the White House to pull back from the new policy.
Here is a sampling of the reaction to the tariff plan by the U.S. business community:
American Association of Port Authorities (AAPA)
“Tariffs are taxes,” AAPA President and CEO Cary Davis said in a release. “Though the port industry supports President Trump’s efforts to combat the flow of illicit drugs, tariffs will slow down our supply chains, tax American businesses, and increase costs for hard-working citizens. Instead, we call on the Administration and Congress to thoughtfully pursue alternatives to achieving these policy goals and exempt items critical to national security from tariffs, including port equipment.”
Retail Industry Leaders Association (RILA)
“We understand the president is working toward an agreement. The leaders of all four nations should come together and work to reach a deal before Feb. 4 because enacting broad-based tariffs will be disruptive to the U.S. economy,” Michael Hanson, RILA’s Senior Executive Vice President of Public Affairs, said in a release. “The American people are counting on President Trump to grow the U.S. economy and lower inflation, and broad-based tariffs will put that at risk.”
National Association of Manufacturers (NAM)
“Manufacturers understand the need to deal with any sort of crisis that involves illicit drugs crossing our border, and we hope the three countries can come together quickly to confront this challenge,” NAM President and CEO Jay Timmons said in a release. “However, with essential tax reforms left on the cutting room floor by the last Congress and the Biden administration, manufacturers are already facing mounting cost pressures. A 25% tariff on Canada and Mexico threatens to upend the very supply chains that have made U.S. manufacturing more competitive globally. The ripple effects will be severe, particularly for small and medium-sized manufacturers that lack the flexibility and capital to rapidly find alternative suppliers or absorb skyrocketing energy costs. These businesses—employing millions of American workers—will face significant disruptions. Ultimately, manufacturers will bear the brunt of these tariffs, undermining our ability to sell our products at a competitive price and putting American jobs at risk.”
American Apparel & Footwear Association (AAFA)
“Widespread tariff actions on Mexico, Canada, and China announced this evening will inject massive costs into our inflation-weary economy while exposing us to a damaging tit-for-tat tariff war that will harm key export markets that U.S. farmers and manufacturers need,” Steve Lamar, AAFA’s president and CEO, said in a release. “We should be forging deeper collaboration with our free trade agreement partners, not taking actions that call into question the very foundation of that partnership."
Healthcare Distribution Alliance (HDA)
“We are concerned that placing tariffs on generic drug products produced outside the U.S. will put additional pressure on an industry that is already experiencing financial distress. Distributors and generic manufacturers and cannot absorb the rising costs of broad tariffs. It is worth noting that distributors operate on low profit margins — 0.3 percent. As a result, the U.S. will likely see new and worsened shortages of important medications and the costs will be passed down to payers and patients, including those in the Medicare and Medicaid programs,” the group said in a statement.
National Retail Federation (NRF)
“We support the Trump administration’s goal of strengthening trade relationships and creating fair and favorable terms for America,” NRF Executive Vice President of Government Relations David French said in a release. “But imposing steep tariffs on three of our closest trading partners is a serious step. We strongly encourage all parties to continue negotiating to find solutions that will strengthen trade relationships and avoid shifting the costs of shared policy failures onto the backs of American families, workers and small businesses.”
Keep ReadingShow less
CSCMP President and CEO Mark Baxa (holding microphone) introduces a panel discussion on the state of the semiconductor industry at the inaugural meeting of the Mexico City CSCMP Roundtable.
With the inaugural meeting of the Mexico City Roundtable on January 23, the Council of Supply Chain Management Professionals (CSCMP) marked a significant step forward in its efforts to expand its presence in Latin America.
The meeting, held at the Mexico City campus of the research university Tecnológico de Monterrey, kicked off with presentations from CSCMP President and CEO Mark Baxa, Country Manager Javier Zarazúa, and Jonathan Albañil of the logistics service provider Dicka Logistics.
“This event was a remarkable milestone for CSCMP in Mexico, and I look forward to the continued growth of this exceptional community," says Baxa.
The opening presentations were followed by a preview of the “2025 State of the Global Semiconductor Supply Chain Report” by Dale Rogers, ON Semiconductor Professor of Business at Arizona State University of Arizona State University, and a Q&A session with five industry experts.
“The insights shared by Dr. Dale Rogers and the distinguished semiconductor panel underscored the critical role this industry plays on the global stage,” says Baxa.
The second edition of semiconductor report will be released in February. The first edition of the report can be found on CSCMP’s website. The report is free to CSCMP members and $299 for nonmembers.
"This report not only sheds light on the challenges and opportunities shaping the semiconductor landscape but also serves as a call to action for greater collaboration, resilience, and strategic foresight in navigating this ever-evolving sector,” says Baxa.
Mexico City is one of seven new roundtables CSCMP announced in December. The others are Monterrey, Guadalajara, Toronto, Panama City, Portugal, and Sao Paulo. More information about CSCMP roundtables can be found here.
In a statement, DCA airport officials said they would open the facility again today for flights after planes were grounded for more than 12 hours. “Reagan National airport will resume flight operations at 11:00am. All airport roads and terminals are open. Some flights have been delayed or cancelled, so passengers are encouraged to check with their airline for specific flight information,” the facility said in a social media post.
An investigation into the cause of the crash is now underway, being led by the National Transportation Safety Board (NTSB) and assisted by the Federal Aviation Administration (FAA). Neither agency had released additional information yet today.
First responders say nearly 70 people may have died in the crash, including all 60 passengers and four crew on the American Airlines flight and three soldiers in the military helicopter after both aircraft appeared to explode upon impact and fall into the Potomac River.
Editor's note:This article was revised on February 3.