Tuesday, February 09, 2010
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KNOWLEDGE MANAGEMENT TAGS
"Supply Chain Management"
Recession driving supply chain management projects
Economic pressures are forcing companies to employ their supply chains, primarily the sourcing and procurement functions, to contain costs and boost revenue, new research reveals.
The 2009 Global Survey of Supply Chain Progress from CSC, Supply Chain Management Review, the Council of Supply Chain Management Professionals (CSCMP) and Michigan State University (MSU), reveals the extent to which the economy has impacted the supply management function. Survey respondents cited an “immediate need” to cut costs as the top economic pressure on their supply chains.
An overwhelming 88 per cent of respondents have set objectives for purchasing to generate cost savings in the next 12 months. This enhanced focus on supply chain management (SCM) demonstrates its use as a counter-cyclical tool for improved business performance, the report noted.
"The global economic downturn has impacted every aspect of business operations, and supply chain is no exception," said Chuck Poirier, author of several books on SCM and a partner in CSC's Global Business Solutions and Services group.
"In the face of a renewed focus on cost reduction, supply chain management continues to show a positive impact on business performance. During the past year companies have turned to their supply chains to cut costs and grow revenues. To a large degree, the supply chain has delivered, helping companies get through some tough times."
The survey shows 33 percent of respondents indicate they leveraged supply chain initiatives to reduce costs between one to five per cent in the last three years. Twenty-seven percent report realising even higher cost reductions, ranging from six to 10 percent. "These results were comparable to last year's," said Poirier.
"However, the most significant improvement over 2008 was in the number of respondents who reported no impact - or did not know the impact - of supply chain initiatives on costs. That number dropped significantly, from 22 percent in 2008 to 13 percent in this year's survey."
In spite of the difficult economy, 32 percent of respondents saw their revenues increase between one to five per cent in the past three years as a result of supply chain initiatives, while another 24 per cent identified revenue increases in the six to 10 per cent range.
The 2009 survey was completed by 176 respondents from both large and mid-sized companies. Fifty-three per cent of the firms indicated their size as $1bn or more in annual sales.
Procurement Tag - Supply Chain Management
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