Supply chain 'less critical than IT'

18 October 2000
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19 October 2000 | David Arminas

Supplier management has slipped in importance as a key method of improving business performance, according to a recent survey of senior UK business executives.

Information technology and systems has taken the lead for the first time, and supplier management has fallen to fifth place, from last year's second.

The twelfth annual survey of trends in industry, by management consultants the Bourton Group, found that business heads rated their company's current structure, production processes and culture as more influential than how they managed suppliers.

But the seven categories of key enablers are seen as less influential than previously.

Although half of respondents made no comment about outsourcing, almost all of those that did said it would increase in the future. Around a third of these respondents identified production as the most likely area for future outsourcing.

Other potential targets were IT, human resources, and logistics and distribution.

Key ways of improving customer response and reducing costs was to employ more temporary staff and make greater use of remote working by full-time employees.

The survey of 298 UK companies with more than 100 employees was conducted in early summer. Half of the respondents were managing directors or other executives with equivalent authority in operations positions.

Main findings

• Global sourcing, and developing effective alliances with companies in several countries, are the most favoured ways of addressing the effects of globalisation

• Reduction of prices is the action most often taken, or being planned, to meet increasing customer demands

• Defending current markets is the hardest task facing companies adapting to a more global marketplace

• Stricter environmental legislation raises most concern of all social issues

• A major concern among employees is staff retention and the ability to secure key skills at short notice and for short periods


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