A recent survey by Hitachi Consulting found that managers are often out of touch with the importance of the supply chain to business strategies and growth. The survey found that 80 percent of supply chain managers do not see it as an enabler of business strategy and 55 percent do not regard it as a fundamental source of business value. Most surprising, 29 percent view the supply chain purely as an operational function.
"These figures are far from reassuring," Cathy Johnson, vice president at Hitachi Consulting told FoodBev.com. "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."
Views of the Supply Chain
The biggest takeaway is that many managers clearly view the supply chain in an archaic fashion. While there may have been a time when operations simply supported the overall business model of a company, they now drive it. E-commerce has made distribution a business model in itself, as successful growth depends on the ability of the supply chain to keep pace with changing demands.
Supply chains are also becoming more complex in a global economy, and it is up to supply chain managers to help ensure that companies are following government regulations and adhering to consumer requests regarding the origin of goods and supplies.
New Technology Helps Tether the Supply Chain to the Business
New data collection solutions that are integrated with existing ERP systems allow decision-makers throughout a company to analyze the effects of the supply chain on business. How product enters, leaves and is handled in the warehouse impacts the bottom line. The ability to track inventory and shipments in real time can provide data that can be used throughout the company.
Electronic data capture can help form a clear picture of how long certain orders take to work their way through the supply chain and at what cost. This allows warehouses to prepare for changing demand and improve forecasting. As consumers continue to voice an increased interest in the supply chain, managers should not doubt that it is a driving force behind many components of the company. From brand reputation to customer service, the supply chain provides much value to a business.