Integrated supply chain key to success

13 December 2007
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13 December 2007 | Paul Snell

Companies aspiring to global success should integrate their supply chain staff with other parts of the business, according to a new report.

The Economist Intelligence Unit says supply chain workers should take an interest in all aspects of the process, including product design, procurement, manufacturing and distribution.

Looking at all aspects of the chain will improve data about products, share information among staff and provide more accurate demand planning.

"The strength of globally integrated supply chains that provide visibility, flexibility and risk management can eliminate hundreds of millions of dollars in costs and help companies grow revenue substantially," the study said.

It cited IBM's supply chain as an example. It has cut suppliers in half, from 66,000 to 33,000, and saved $20 billion in five years - because supply chain executives work within product teams.

Buyers were also urged to keep their supply chains flexible to cope with increasing globalisation. "It's an opportunity and a challenge," said Debra D'Agostino, senior technology editor at the Economist Intelligence Unit. "Many companies' supply chain systems are designed for domestic sourcing, and they will need to make fundamental changes in operations and organisational structure to remain competitive."


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