Thursday, September 17, 2009
Economic pressures are forcing companies to employ their supply chains, primarily the sourcing and procurement functions, to contain costs and boost revenue, according to the 2009 Global Survey of Supply Chain Progress from Supply Chain Management Review, the Council of Supply Chain Management Professionals (CSCMP), Supply Chain Europe, CSC, and Michigan State University (MSU).
The survey, completed by supply chain executives representing more than 20 industries and every major geographical segment of the world, shows 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 percent 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 survey shows 33 percent of respondents indicate they leveraged supply chain initiatives to reduce costs between one to five percent in the last three years. Twenty-seven percent report realizing even higher cost reductions, ranging from six to 10 percent. In spite of the difficult economy, 32 percent of respondents saw their revenues increase between one to five percent in the past three years as a result of supply chain initiatives, while another 24 percent identified revenue increases in the six to 10 percent range.
While a majority of respondents indicate they are already using their supply chain to trim logistics costs, source more strategically and generate additional savings by leveraging the purchasing function, companies that are considered supply chain leaders are going a step further: accelerating revenue generation by integrating the supply chain organization with key internal groups such as finance, IT and product development.
For the first time, this year's survey included questions about supply chain sustainability and green initiatives. Eighty-seven percent of respondents report they are either evaluating or implementing options related to supply chain sustainability; just under half of those have already implemented such initiatives. Sixty-two percent report paying more attention to green/sustainability issues today than they were 18 months ago.
The 2009 survey was completed by 176 respondents from both large and mid-sized companies. Fifty-three percent of the firms indicated their size as $1 billion or more in annual sales, while revenues of the remaining companies ranged from $250 million to $1 billion.
View the complete survey report.
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