Businesses Have too Many Supply Chain Priorities to Fully Deliver Business Goals

New research shows that businesses have to address the disconnect between the chief executive officer agenda and the day-to-day management of the supply chain. Respondents to Hitachi Consulting’s supply chain survey were evidently well aware of the business value that their supply chains provide, yet with no fewer than 14 different supply chain priorities, they admitted that they have too many priorities to pursue all of them with equal vigour and ultimately deliver success.

The bespoke survey, spanning nine European countries, aimed to identify the extent to which supply chain management activities and priorities are aligned with the strategic transformation agenda. When asked to assess the importance of a number of specified supply chain levers – the supply chain’s people, processes, technologies, KPIs and physical footprint – on their organisation’s effectiveness in meeting market requirements, respondents were unequivocal, declaring that they all had a significant impact on performance. As a result the survey revealed that what is needed is a clear hierarchy of supply chain priorities, based around overarching business goals.

Jesper Jelmteg, Senior Vice President of the Industrial Sector at Hitachi Consulting, comments on the findings:

“Management teams must give the required amount of attention to deliver on supply chain objectives. They must step back, build the picture, align and prioritise their objectives and then deploy the appropriate change resource. 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. From what we can see, businesses need a clear transformation roadmap – complete with prioritisation, sequencing change management – to align communication at all levels of an organisation, from the factory floor to the board room.”

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 are not anticipating the requisite level of change.

Cedric Parentelli, Vice President Supply Chain at Hitachi Consulting, comments:

“Time and again, business leaders come to us for help in executing supply chain transformation, as they know it drives both growth and profitability. For operational execution to be truly successful, it’s necessary for organisations to align a clear hierarchy of supply chain priorities, based on overarching business goals, and engage people at all levels across the organisation. This alignment and engagement enables the creation of a shared vision, sense of urgency, and a focus on specific improvement projects.”

 

From: Hitachi Consulting

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