"Reducing operation costs " no longer the top priority per Gartner & SCDigest survey - Do you agree?
Posted by Melanie Howell on Mon, Aug 02, 2010
Gartner and SCDigest recently published their Supply Chain Study survey , covering a number of supply chain issues and trends.
The third annual survey shows for the first time that “reducing operating costs” is not the #1 imperative of supply chain initiatives. Granted, it's still #2, with the top spot taken by "improving efficiency and/or productivity", up from the fourth spot in 2009.
The survey predicts that the #1 driver for 2012 will be 'supporting company growth'.
John Westerveld, from the 21st Century Supply chain, in his blog article makes an interesting comment: The real question is whether this expectation from the survey is from the usual appreciation of business cycles that have long been through expansions and contractions? Or is it from a collective impression that things are in fact getting better?"
The study also highlights three barriers to achieving supply chain goals. (These responses are based on the percentage of people that selected their three most important barriers):
- Forecast accuracy/demand variability (59%)
- Supply chain network complexity (42%)
- Lack of internal cross functional collaboration and visibility (39%)
John Westerveld also highlights another research report, PRTM Global Supply Chain Trends Report 2010-2012 (free download with registration). Please check it out for further review.
Here is a chart highlighting the Supply Chain Application Adoption Phase for the survey respondents:
If indeed "supporting company growth" becomes the #1 priority in the upcoming 3 years, it would require urgent action by companies, to ensure that their end to end supply chain network is supported by integrated ERP and warehouse management systems.
In my MBA class, Organizational Change, we learned that change in one area of the organization will have an effect on all the other areas of the organization. This may not seem like such a big deal at first, or at least it didn't in our MBA class at the time, but you learn by experience that when management has to enforce change in the organization it can get quite stressful.
Before implementing a new ERP system or upgrading your warehouse management system to better manage your supply chain issues, sit down for a planning session, take a good look at your organization as a whole. Make plans about how you will manage change in your organization, get the influencers on board with the plan and then everyone else is likely to follow. Have a contingency plan incase things don't go as forecasted.
It seems that Supply Chain complexity and Forecast accuracy (supply chain barriers addressed above) can be managed with good business management systems, however there is a certain measure of planning that needs to take place for creating cross functional collaboration and visibility within your organization.
What are some issues you see in your organization when it comes to the supply chain? Do you have any comments on the survey results for Supply Chain Barriers? Leave a comment.
If you are considering supply chain systems or ERP systems check out our warehouse management solutions, manufacturing solutions and download our whitepapers to help you with the software evaluation process.