Execs vote SCM schemes a success

27 April 2005
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28 April 2005 | Geraint John

Supply chain management (SCM) initiatives have been ranked the second most successful in a global survey of management tools and techniques.

SCM scored 3.99 out of a possible 5 on satisfaction - second only to strategic planning - in the survey of almost 1,000 executives by consultancy Bain & Company.

In the previous survey, in 2002, it was sixteenth.

However, according to the latest study, SCM was used by only 56 per cent of companies, placing it fourteenth out of 25 tools and well behind those such as customer relationship management, benchmarking, outsourcing and business process re-engineering.

Carlos Niezen, a Dallas-based partner and procurement specialist at Bain, attributed the jump in satisfaction with SCM to its growing maturity, particularly in technology, and a heavy emphasis on cost-cutting in recent years.

But he noted the survey indicated that innovation and growth were now the main priority for business leaders.

Among European companies, nine out of 10 agreed that "innovation is more important than cost reduction for long-term success", and 69 per cent said they should focus more on revenue growth and less on cost-cutting.

"The message for procurement and supply chain functions is that top executives now want them not only to lower costs, but also to play a role in capturing supplier innovation, speeding up the time to market and improving service to customers," Niezen said.

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