Leaders recognise supply chain value: survey

US research including the Asia Pacific proves a shift in thinking from prioritising operational efficiency to making supply chain excellence a goal

Leaders recognise supply chain value: survey
Leaders recognise supply chain value: survey

October 23, 2012

New research from the United States and
including the Asia Pacific proves there is a shift in board room thinking from prioritising operational efficiency to making supply chain excellence a goal.

The Chief Supply Chain Officer Report 2012 from US think tank SCM World reveals evidence companies increasingly view their supply chain as a driver of revenue growth and competitive advantage.

The global study of nearly 1,400 executives finds better customer service, faster new product introduction and stronger supplier relationships are among the key drivers supply chain professionals are using to create value for their businesses.

Almost two-thirds of executives surveyed say operating cost reduction is
‘very important’ for their supply chain function.

50 percent state increasing sales revenue and differentiating customer service from that of their competitors is
also ‘very important’.

According to survey participants, specific ways in which supply chain excellence boosts top-line growth, include the ability to launch new products on schedule, to ramp up production quickly, encourage repeat purchases through enhanced customer loyalty and to receive priority treatment from suppliers during periods when key materials and components are in short supply.

SCM World Chairman Dr Hau Lee says as a result, the importance of the supply chain function is growing.

"Six out of ten respondents agree supply chain is understood as an equally important part of business success as sales and marketing or R&D and product development," Dr Lee says.

compares with just ten percent who believe it is still seen as a cost center or service function.

"Our research shows more and more companies are using supply chain excellence as a means to create value and competitive advantage.

"Those that still view supply chain management as a supporting function, or see it only as a way to reduce operating costs, have a lot of catching up to do. They are missing great opportunities."

Dr Lee adds capitalising on opportunities demands close alignment between supply chain activities and business objectives.

"A value-creation view of supply chain management requires supply chain executives to work closely as an integrated part of the company’s top executive team," he says.

"The supply chain function is not in the background in driving the company’s strategic performance; rather, it becomes part of the steering team in the executive suite."

Other Key Findings of the Survey Include:

Digital and eCommerce:
The steady growth of online shopping is increasing supply chain complexity at many levels and forcing those closest to the consumer to adapt.

Social and environmental responsibility (SER):
The trend towards SER initiatives seems unstoppable, and companies are becoming less tolerant of violations.

Risk management:
The vast majority of companies have been hit financially by disruptions recently, and executives are on high alert when it comes to their suppliers.

Talent management:
Supply chain leaders report increasing difficulty in the past year in finding, hiring and retaining skilled people – particularly in China.

A total of 1,385 supply chain, operations, procurement, and other executives completed an online SCM World survey in July 2012.

Participants work in a wide variety of sectors – the biggest being high technology, consumer packaged goods, industrials, food and beverages, healthcare, pharmaceuticals, chemicals, logistics and distribution, and retail.

They are based across the major regions of the world: 38% each in the Americas and EMEA, 23% in Asia-Pacific.

Half of the companies they represent have annual sales of more than $5 billion.

Download a full copy of The Chief Supply Chain Officer Report 2012.

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