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Eighth Annual Global Supply Chain Survey

Yes, we’ve all experienced some formidable challenges during the economic downturn of the past two years. But things could have been a lot worse were it not for the supply chain’s positive impact on costs, revenues, and operations. That’s just one conclusion of our annual survey, which suggests brighter times ahead and encourages supply chain professionals to get ready for the upturn.

By ·

There is no question that during the recent economic downturn, companies turned to their supply chain and supply chain management (SCM) for help. Our 2010 Global Survey of Supply Chain Progress shows that, as might be expected, they did so with varying results in terms of the impacts on costs, revenues, and customer satisfaction.  Compared to previous surveys, we saw a reported drop in the level of overall cost savings and revenue increases attributable to SCM initiatives. Importantly, there was a sharp difference in performance on these measures between firms considered to be supply chain leaders and the others—what we term the followers and the laggards. For example, the leaders reported twice as much revenue gain as the followers.

This year’s survey results further suggest that most firms are at or near the bottom of the economic trough and are slowly coming back to more favorable conditions.  As expected, the leaders are rebounding faster than the followers and laggards. Yet from other information we have used to augment our conclusions from the survey results, we find that hiring is still conservative and the focus remains on cost reduction.  Large companies remain conservative in their investments, foregoing new capital and concentrating on fixing existing capital. In that scenario, SCM becomes one of the major means to find cost improvement—right behind reductions in staff.

There appears to be a continuing emphasis on suppliers to help firms cope with adverse conditions. We see no lessening of that focus. Our survey showed clear evidence that companies relied more on suppliers to help with cost control, new product development and meeting customer demands this year.  At the same time, there was continued expectation of finding better prices, or the buyer would shift its supply base.  The key for suppliers was sustaining the most important customer base by offering help in both areas. This emphasis is expected to continue for at least another 12 months, as firms seek significant reductions to costs through pressure on suppliers and changes to the supply base.

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There is no question that during the recent economic downturn, companies turned to their supply chain and supply chain management (SCM) for help. Our 2010 Global Survey of Supply Chain Progress shows that, as might be expected, they did so with varying results in terms of the impacts on costs, revenues, and customer satisfaction.  Compared to previous surveys, we saw a reported drop in the level of overall cost savings and revenue increases attributable to SCM initiatives. Importantly, there was a sharp difference in performance on these measures between firms considered to be supply chain leaders and the others—what we term the followers and the laggards. For example, the leaders reported twice as much revenue gain as the followers.

This year’s survey results further suggest that most firms are at or near the bottom of the economic trough and are slowly coming back to more favorable conditions.  As expected, the leaders are rebounding faster than the followers and laggards. Yet from other information we have used to augment our conclusions from the survey results, we find that hiring is still conservative and the focus remains on cost reduction.  Large companies remain conservative in their investments, foregoing new capital and concentrating on fixing existing capital. In that scenario, SCM becomes one of the major means to find cost improvement—right behind reductions in staff.

There appears to be a continuing emphasis on suppliers to help firms cope with adverse conditions. We see no lessening of that focus. Our survey showed clear evidence that companies relied more on suppliers to help with cost control, new product development and meeting customer demands this year.  At the same time, there was continued expectation of finding better prices, or the buyer would shift its supply base.  The key for suppliers was sustaining the most important customer base by offering help in both areas. This emphasis is expected to continue for at least another 12 months, as firms seek significant reductions to costs through pressure on suppliers and changes to the supply base.

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EDITORS' PICKS
Supply Chain Management Issues Confronting Us This Year
A variety of fresh challenges will surface for global traders in January and beyond
Global Supply Chain Pricing May Face New Pressures in 2019
The global economy started 2018 with strong, synchronized growth, but the momentum faded as the year...

IHS Markit’s New Economic “Predictions” for 2019 and Impact on Global Supply Chains
The U.S. will remain “above trend,” while other key economies will experience further...
Global Kuehne + Nagel Indicators Signal Global Supply Chain Resilience
So far this year, international merchandise trade has risen by 10.6%. Emerging markets and North...