Wednesday, September 22, 2010

Survival of the Fittest Supply Chains

(Industry Week – David Blanchard)

Probably nobody knows exactly how many suppliers make up the global supply chain, but according to one recent estimate, there are nearly 5 million unique suppliers in use by Fortune 1000 companies. Based on its multi-year analysis of suppliers to the Fortune 1000, CVM Solutions says that roughly 310,000 (6%) suppliers were used by two or more companies in 2009. And that number is down 15% from 366,000 in 2008.

“The overall number of relevant and highly used suppliers is significantly smaller than many believed,” says Mike Anguiano, chairman of CVM Solutions, a provider of supplier management solutions. “We also noticed that, despite the disappearance of certain suppliers, a new crop of suppliers were being added. This trend leads us to believe that there is a Darwinian effect occurring in the supply chain as Fortune 1000 companies cut weaker suppliers and replace them with stronger ones.” Read more here.