1 in 3 Buyers Working With Troubled Manufacturers

  • By Josh Green
  • · March 11, 2009
  • ·

Last month, we released data that highlighted the impact of the economic downturn on manufacturers around the world.  This month the Panjiva research team focused on U.S. buyers, in order to get a sense of how many are exposed to significant risk by virtue of doing business with troubled manufacturers.

Specifically, we focused on the most active U.S. buyers — those receiving 10 or more shipments in the last year.  It turns out that more than 1 in 3 of these buyers maintains an active relationship with an overseas manufacturer that is on Panjiva’s Watch List (as a result of suffering a 50% decline in volume shipped to U.S. customers during the most recent 3 month period, versus the same period a year ago).

The numbers:

  • 28% of significant manufacturers (those sending 10 or more shipments to U.S. buyers in the last year) are on Panjiva’s Watch List.
  • 38% of significant buyers received a shipment from a Watch List manufacturer within the last three months.
  • 47% of significant buyers received a shipment from a Watch List manufacturer within the last six months.

As we look higher up the food chain, the numbers are even scarier:

UPDATE, 9 AM — I just shared these numbers with a supply chain manager at a major retailer; he responded:

Interesting.  Seems reasonable though given the number of suppliers I’ve seen go bankrupt recently…the worst part is they never even tell you they are in trouble or gone…they just disappear…”

  1. Angela Cardenas  ·  March 12, 2009

    That comment “they just disappear” describes the complacency I am seeing around supply risk. We need to do a better job keeping tabs on our suppliers – watching their financial statements and managing relationships – and developing partnerships. If the bankrupt suppliers are single sourced, how will you satisfy your customers? Struggling suppliers can take your business down with theirs…

  2. Nader Fathi  ·  April 8, 2009

    It is amazing that in this day and age so many manufacturers continue to have so many quality problems. There are great software tools in the market that can help OEMs and manufacturers find, fix and avoid quality issues throughout products’ entire lifecycles, from the time products are manufactured to when they are returned by a customer, should that occur.

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