Almost two-thirds of executives 'not confident about supply chain capabilities'

26 May 2015

Only 38 per cent of executives are "extremely" or "very" confident their supply chain organisation has the competencies it needs, a survey has found.

Deloitte’s third annual supply chain survey also revealed only 43 per cent of respondents considered their supply chain organisation to be excellent or very good when it comes to “strategic thinking and problem solving”.

But 44 per cent of the 400 respondents believed their organisations would be able to put the required knowledge, skills, and abilities in place in the future.

Some 48 per cent of respondents say they are very or extremely likely to locate high-value added activities into centres of excellence within five years. And roughly one-third of executives expect their company to increase control of the supply chain function.

In their survey Deloitte drew a distinction between what the authors considered supply chain "leaders” and "followers”.

Supply chain leaders - 8 per cent of the total - were those with the highest inventory turnover and percentage of deliveries on-time and in-full. The report said as well as being better performing in financial terms, supply chain leaders appear to be more innovative and are more likely to employ advanced technical capabilities.

“A gulf opens up between supply chain leaders and followers in their use of control tower analytics and visualisation. These tools transform real-time data from global suppliers into vivid supply chain maps - making it easier for managers to maintain current awareness and make good decisions,” the report said.

Supply chain leaders were more likely to make operating model changes than supply chain followers. Sixty per cent of supply chain leaders for example, were contemplating insourcing activities that were previously outsourced compared to only 28 per cent of “followers”.

“We see in the supply chain leaders’ response an awareness that the economics of outsourcing shift constantly, and a greater readiness to revisit arrangements as circumstances demand,” said the report.

The survey looked at the impact technologies such as 3D printing would have on supply chains as it becomes more common and moves from being a prototyping tool to a full-scale production technology.

Twenty-four per cent of respondents from manufacturing firms report they are currently using it in some form; another 21 per cent expect they will do so within the next three years. At Boeing, for example, R&D engineer David Dietrich explained how such machines might be used to rapidly manufacture parts in remote locations.

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