Resources Global Professionals recently completed the annual global survey of supply chain leaders and executives and received over 100 responses: 70% of the responses were from publicly traded companies, and 60% were from companies that have global / multi-national operations.
The purpose of the survey was to gather key thoughts and information from these leaders, and to provide the results to supply chain management professionals as a means of understanding challenges, trends, and best practices.
The results revealed that cost containment and cost reduction continue to remain very high priorities for the coming year. Two additional consistent responses: First, is the desire to have technology play a key role in their transformational efforts to move away from tactical activity to a more strategic focus. Secondly, leaders are focusing efforts to ensure that sourcing decisions factor in a risk assessment analysis in addition to the traditional price and total cost of ownership model.
The complete summary of our seven major findings are:
1. Cost containment and Cost Reductions are high priority.
When we asked the question, “What are your top five challenges for the upcoming year?” 70% of the respondents selected reducing cost and keeping spend in check. Along these same lines, we asked “How do you measure and report your organizational success?” The three most popular responses were (a) savings realized, (b) cost reductions/containment, and (c) concentration on cost avoidance.
2. Organizational effectiveness is a primary focus.
When asked the question “Beyond cost reduction/containment objectives, how do you measure your value?” It became clear that supply chain leaders are working hard to reduce risk and failures, ensure continuity of supply, and to gain the trust and respect of their internal customers.
3. Process improvement & technology enhancement are critical success factors to achieve supply chain excellence.
To accomplish this feat, leaders are concentrating on process improvement and using technology to move their focus away from transactional activity to more strategic initiatives.
4. Category Management and Strategic Sourcing remains the cornerstone of supply chain management organizations. Effective supply chain organizations are being asked to investigate spend categories not previously addressed (i.e. legal, marketing, advertising, IT, facilities, etc.), and to do these strategic sourcing efforts in a collaborative manner.
5. Supplier Relationship Management & Risk Mitigation.
Are integral to supply chain contribution and effectiveness. Leaders recognize the value that the supply base can bring to the table for their key core spend categories. Furthermore, sourcing decisions today are based not just on price and total cost of ownership, but an additional factor in the decision-tree process is that of risk assessment.
6. Inventory and Materials Management will have more focus.
This was recognized as an area of focus in 2011 and leaders continue to emphasize its importance in the coming year. Demand Planning and Forecasting accuracy will be a target objective.
7. Contract Management plays a key role to ensure risk mitigation and compliance.
An increasing number of supply chain organizations are assuming the responsibility for contract management and this function is seen as a vital component in the success of the organization. Effective contract management not only provides visibility into spend patterns, but also is a key contributor to ensuring risk mitigation and serves as a vehicle for compliance.
Is your organization working through any of these initiatives? Resources Global can help! Contact us and we’ll put you in touch with the Supply Chain Management experts at Resources Global Professionals in your local region.