Responsiveness, strategic alignment, collaboration and sustainability are key drivers for transformation in today’s market.
After an industry-wide survey of more than 800 companies, Aberdeen, a Harte-Hanks Company, published the recent report, “The Supply Chain Executive’s Strategic Agenda 2008,” which outlined information revealed from supply chain executives about their priorities and strategic intentions across all areas of supply chain management from planning to execution and management. Illustrating key trends in supply chain transformation, fifty-six percent (56%) of companies that participated in the study regard supply chain management as a market strategy differentiator, a customer service differentiator or as a profit center, as opposed to strictly a cost of doing business.
Against this backdrop, the top 3 pressures driving companies to focus on supply chain transformation today are cost containment (68% of companies), followed by escalating customer service demands (49% of companies) and the restructuring requirements brought on by the increase in industry acquisition and divesture activity (44% of companies). The drivers for transformation can be summarized into the following four categories: responsiveness, strategic alignment, collaboration and sustainability.
Survey results show that the firms enjoying Best-in-Class performance shared several common characteristics involving various aspects of process, reporting, data, technology, etc. Results show that:
- Best-in-Class companies are 1.7 times more likely than all others to have a closed-loop integration of supply chain planning and execution.
- Best-in-Class companies are 2 times more likely to have end-to-end supply chain data and process visibility than all others.
- Best-in-Class companies are 1.5 times more likely than all others to have implemented cross-functional metrics across their enterprise.
- Best-in-Class companies are 2 times more likely than all others to have a formalized supply chain risk management initiative.
“We conducted numerous interviews in a variety of industries (automotive, consumer packaged goods, high-tech semiconductor, chemicals and healthcare) and there was nearly unanimous recognition of the need for supply chain transformation driven by factors such as the globalization of supply, increasing competitive pressures, and dwindling product life cycles,” said Robert Shecterle, Vice President, Supply Chain, Aberdeen.
“The technology application areas that participants are prioritizing, in particular global supply chain visibility and Sales and Operations planning (S&OP), reflect the challenges driving the dramatic transformation that companies are facing,” said Shecterle.