Businesses are failing to deliver their goals because they have too many supply chain priorities.
According to new research, managements are not focusing enough attention on delivering on their supply chain objectives.
The findings, from global management consulting and IT services business Hitachi Consulting, warn of a “disconnect” between chief executives’ agenda and the day-to-day management of the supply chain.
The research was based on a survey of 100 supply chain managers and directors from firms with turnovers between 5M and 50M in September 2013 across nine European countries.
Too many priorities
Respondents were well aware of the business value their supply chains provide, but with no fewer than 14 supply chain priorities, they admitted they had too many to pursue all of them with equal vigour and deliver success.
When asked to assess the importance of a number of supply chain levers – people, processes, technologies, key performance indicators and physical footprint – on their organisation’s effectiveness in meeting market requirements, respondents declared that all had a big impact on performance.
Consequently, what was needed was a clear hierarchy of supply chain priorities, based around overarching business goals.
“Management teams must give the required amount of attention to deliver on supply chain objectives,” said Jesper Jelmteg, senior vice president of the industrial sector at Hitachi Consulting. “They must step back, build the picture, align and prioritise their objectives and then deploy the appropriate change resource.
Need significant resources
“Pursued diligently, activities such as supplier and customer collaboration, footprint optimisation, and the development of a more customer-centric supply chain model, all need significant resources.”
The survey also showed that when faced with a situation where a significant change in their business’s supply chain strategies, processes, and priorities would be called for, three quarters (72%) of supply chain managers and directors admitted that they were not anticipating the requisite level of change.
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