Supply chain not seen as business strategy enabler

The majority (80%) of supply chain managers do not see their supply chain as an enabler of business strategies within their organisation, according to a recent survey.

The survey, which spanned nine European countries, found that just over half (55%) of the respondents do not regard their business’s supply chain as a fundamental source of business value and competitive advantage and almost a third (29%) see it as purely an operational function.

Hitachi Consulting, the global management consulting and IT services business of Hitachi, carried out the survey.

Cathy Johnson, vice president at Hitachi Consulting, said: “These figures are far from reassuring. For the most part, it seems that senior executives understand the strategic importance of the supply chain, yet the managers who deal with the supply chain on a day-to-day basis do not.

“A supply chain that doesn’t support the overarching business strategy, and which doesn’t deliver competitive edge – and which isn’t going to deliver a material change in performance over the next five years – is clearly not a desirable asset.”

Hitachi Consulting’s survey also found that only a third (33%) of respondents believed that their organisation’s supply chain would deliver an improved customer experience over the next five years. 

Almost half (45%) of respondents did not believe that their organisation’s supply chain would deliver increased profitability and 46% did not believe that their organisation’s supply chain would deliver a reduced working capital requirement.

Only 43% believed that their organisation’s supply chain would improve sales revenues over next five years.

Greg Kinsey, vice president of marketing for the EMEA region at Hitachi Consulting, said: “The results from our survey make one thing very clear: the disconnect between a company’s business transformation strategy and the day-to-day management of the supply chain remains a serious, yet hidden, problem for many organisations.

"Our real concern is the lack of alignment, sense of urgency and change readiness within the operations. This should be a wake-up call for both senior executives and operational managers.”