Plummeting sales disrupt supply chains

Falling customer demand is one of the chief causes of supply chain disruption, a study has found.

US based research company, Aberdeen Group, questioned more than 200 supply chain executives worldwide about industry trends over the 2008/09 financial year.

A total of 62 per cent said a reduction in customer demand had impacted their supply chain. Organisations are struggling to accurately forecast requirements and are carrying greater levels of stock, the report said.

A US supply chain manager told Aberdeen: "Our retail customers are driving inventories down. When they are carrying less stock we have to carry more stock to cover their increased demand volatility."

Unpredictable raw material, fuel and commodity prices were also a major source of disruption for a large number of respondents.

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