Decreased US Federal government spending and private supply chain impact

An article in the Wall Street Journal (August 9, 2011) describes the impact of decreases in spending by the federal government ($ 917 billion in cuts over 10 years) and the impact of the loss of their consistency in spending and reliability in contract execution.   From 97 % for Lockheed Martin to 27 % of volume for Dell , government contracts have a large impact.  Will the supply chain cost impact be larger than the magnitude of the demand impact due to a decrease in demand stability ? Will these demand changes result in a ripple effect across the supply chain ?  Will these changes have a disproportionate impact on domestic suppliers due to the need to satisfy “Buy American” policies for many government contracts ?

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About aviyer2010

Professor
This entry was posted in Operations Management, Supply Chain Issues and tagged , , , , . Bookmark the permalink.

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