Companies must improve supply chain management

28 April 2009

29 April 2009 | Jake Kanter

Supply chain management plays a "critical" role in the financial health of organisations, according to a new study, but many executives admit their company procedures need improvement.

Of 120 worldwide supply chain executives surveyed by consultancy Capgemini, 29 per cent said that supply management had a tangible impact on the financial position of their business.

In addition, some 16 per cent of respondents to the Global Supply Chain Planning Study 2009 said effective supply chain management processes provided their organisation with a competitive advantage.

But despite these findings, 65 per cent said their supply chain management procedures "need to improve" or they are still "seeking best practice".

Steve Lambert, supply chain planning global leader at Capgemini, said: "Effective planning is crucial to achieving a truly world-class supply chain, which in turn determines the success and often the survival of organisations in the current global market."

Not having enough ability to respond quickly to changing supply and demand conditions was listed as the top planning challenge by those surveyed. This was closely followed by not having effective forecasting capabilities - an area where 52 per cent of the respondents also felt there was a good opportunity for improvement.

Some 43 per cent of the supply chain managers surveyed said changing commodity prices and availability was the biggest risk to successful supply chain operations. A separate 26 per cent argued it was exchange rate fluctuations, while 20 per cent said it was managing the quality of products secured through low-cost country sourcing.

SMapr2009

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