The five major issues facing supply chain leaders

30 September 2013

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1 October 2013 | Gurjit Degun

Supply chain leaders must invest in developing their team’s skills to meet growing expectations about how procurement can support the business.

A survey of 750 senior supply chain professionals by SCM World, found they are facing five major issues.

Kevin O’Marah, chief content officer at SCM World and co-author of the report, said: “Supply chain needs to catch up to the bigger role we have claimed for ourselves in recent years. Unfortunately, we still seem to struggle with developing the skill sets required among our teams.

“Too little systematic talent development and too hazy a measurement system may be confounding our efforts and investments at exactly the time they are needed most.”

The five issues cited by The Chief Supply Chain Officer Report 2013 were:

●The need to continue to reduce costs while improving customer service and supporting expansion in new markets and product lines. Some 68 per cent of respondents said operating cost reduction is “very important”, compared with 64 per cent in 2012.

●The need to manage the “complexity of ‘omnichannel’ selling and customer fulfillment”. More than half (55 per cent) said the demands of e-commerce and mobile-enabled consumers are increasing the number of stock keeping units they have to support. Almost 55 per cent reported they are building new distribution centres, and 48 per cent are building direct-to-customer fulfillment capabilities.

●The fact boards expect lower costs and greater efficiency. Nearly half (47 per cent) agreed this was the case this year, up from 43 per cent last year, and 32 per cent in 2011.

●Following the horse meat scandal, safety and quality incidents are at the top of the risk index, with 37 per cent reporting that they are “very concerned” about this for 2013-14 and 35 per cent are “concerned”.

●Facilitating career progression, developing new production skills and demonstrating a return on investment is a further issue. Three-quarters (76 per cent) said providing compelling career options for talented supply chain staff is “challenging”, this is up from 66 per cent in each of the previous two years. Some 53 per cent believe new product introduction and launch capabilities are now “essential” for supply chain, up from just 18 per cent in 2011. And 53 per cent of respondents – and 31 per cent of those spending 5 per cent or more of their personnel costs on training and development – say they don’t track return on investment.

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