CSC says visibility counts12 April 2012
Consulting company CSC has concluded a global survey of supply chain managers, finding visibility and flexibility are key to supply chain success of market leaders.
For the ninth of the surveys, CSC worked with Neeley School of Business and Supply Chain Management Review. It questioned supply chain managers surveyed manufacturers and service organizations across 20 industries, with company sizes ranging from $250m to over $1bn. "Supply chain has shifted its role from defense and survival last year to contributing to profitable growth," said Ron Johnson, partner at CSC.
"Over the nine years there is a steady elevation of supply chain as a strategic entity within the enterprise, versus a back-office transaction component."
CSC said respondents reported that supply chain management initiatives were increasingly making an impact, but leaders benefitted from the most.
A three-year average of supply chain’s contribution to revenue increased from 4.0% last year to 8.5% this year, with leaders seeing 1a 0% increase.
Supply chain management contributes an average of 6.9% to cost reduction overall and 8.0% cost reduction among supply chain leaders, the survey found.
Leaders were likely to position the leading supply chain manager directly report to a corporate officer, for example an EVP, a CSCO, or a COO.
Supply chain leaders are also building systems and developing partnerships with greater visibility.
Leaders promote visibility into their customers’ sales information, promotional plans and demand forecasts as well as their suppliers’ inventory, order lead times and delivery dates.
Nevertheless only 50–60% of businesses had confidence in the quality of their data with respect to timeliness, accuracy, and completeness.
Leaders are twice as likely as laggards to use data analytics software frequently and extract useful information from it.
Leaders that are flexible enough to quickly reorganize supply chain operations, such as production volume, to respond to new threats or opportunities, profit more and score higher in cost reduction.
High visibility into supply chains correlated with higher cost reduction, the survey found.
Leaders had more product customization and organization flexibility, which the report concludes were “leading edge areas of improvement potential.”
The survey concluded that a combination of visibility and analytics skills, along with the flexibility to take advantage of data, is key to growth.