Customer demands ‘not linked to supply chain performance’

9 December 2009
9 December 2009 | Jake Kanter

International companies are struggling to collaborate effectively with suppliers and business customers, research has found.

A survey of 400 global business executives, including buyers, found 68 per cent considered vendors essential to their companies’ ability to function effectively. Over half said business networks are becoming increasingly complex and interdependent.

Despite this, only 8 per cent believe their firm was “highly effective” at balancing the demands of customers with supply chain performance. A further 43 per cent said their companies must improve on this, particularly when client demands are increasing.

Over half noted that their firms’ customers were applying greater pressure to improve productivity and performance.

Commenting in the study, Tom Larkin, chief operating officer, supply management, at financial services firm Credit Suisse, said: “Our customers are asking more of us. They are demanding that we are world-class in all of our activities, which ultimately is driving us to enhance our relationships with suppliers.”

Effective procurement is seen as essential to improving performance and cutting waste. Some 42 per cent of the business executives quizzed said they “rely heavily” on vendors to meet customer needs and 51 per cent said aligning their supply chain with these demands was crucial to improving service levels.

Only 6 per cent have technology that integrates all their business partnerships, while 51 per cent have systems with select partners.

The Business Performance Management Forum and the Chief Marketing Officer Council carried out the study. Liz Miller, vice president of both organisations, said: “Business models are more dependent than ever on complex, cross-company collaboration for business innovation, product and service delivery and customer satisfaction.”

Developing information systems and educating corporate cultures is critical to boosting collaboration in this complex environment, she said.
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