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The Oil Playbook
GM is far from alone in requiring technology to constantly juggle and analyze the effects of oil on its supply chain. Consider the airlines, which has been forced to park gas-guzzling planes and lay off thousands of workers, or transportation companies.
Todd Carter, vice president and general manager of global transportation management for Ryder System, one of the world's largest transportation companies, says he is seeing an unprecedented amount of concern among the company's customer base.
"I would say most, if not all of our larger customers, have met with us in the last 180 days to discuss their options," says Carter. "Everybody is reevaluating their supply chains."
The company is beginning to see a shift away from sourcing overseas to sourcing from nearer markets like Mexico and Brazil.
Like GM, Carter says it is imperative for companies to have systems in place that can evaluate and make supply chain planning decisions. And he echoes the assertion that it is IT's responsibility to support operations people in executing those planning decisions. Supply chain planning software that can analyze many variables such as the cost of transportation, tariffs, and cost at source, is key.
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Carter says he sees a great deal of merit in having playbooks ready to react as oil crosses critical thresholds. The price of oil has already claimed casualties in some sectors, like the airline industry, and those companies that can respond first may be able to survive and prosper at the expense of their slower rivals.
"I'm sure some of our more technically advanced companies have done it, [adopted playbooks] or something similar, but I don't think most are that far along," he adds.
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