Aug 21 2007 7:05AM | Permalink | Email this | Comments (0) |
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Well the beat goes on!  The sub prime mortgage lending debacle continues to dominate the news as well as international financial markets.  There was an interesting article in the August 19, 2007 issue of The New York Times.  The “net – net” of the article was that builders, home buyers, lenders, security analysts and government agencies failed to read the signs once again.  The article also said that the two main reasons for this were greed and a lack of knowledge on the part of all of the players.

So having said this, I wonder what lessons we can learn from the mortgage fiasco that will help us properly manage the supply chain.  For example, we know that the one of the current key drivers in the supply chain management is “cost out”.  In fact many of the public builders have had strategies to reduce cost in the supply chain.  Some have even moved into the supply chain itself attempting to make it more efficient.

As I have mentioned in the past, nothing stays the same and we should all be looking for ways in which we can make the supply chain more efficient.  However, as we attempt to do this we must be cautious to remember that we can take companies out of the supply chain; it might be perilous to attempt to shrink the functions or steps out of it.  The basic steps in the chain are manufacturing, shipping, breaking bulk and installations.

I just hope that when the key players are trying to change the supply chain that they do so without greed or lack of knowledge.