Supply chain standards 'driving growth and efficiencies'

03 October 2012


Posted by Satvir Bhullar

In addition to enhancing operational efficiency, supply chain excellence and strong standards in this area can produce a range of other benefits, including revenue growth.

This is according to a new study, which revealed companies are looking at their logistics operations to produce competitive advantage, with almost 1,400 executives in the US polled about their supply chains.

Professionals in the field are adding value to businesses in a variety of ways, with strong supply chain standards found to deliver faster production introduction, stronger relationships with suppliers and better customer service, among other benefits.

The global research by SCM World indicated businesses are looking beyond operational excellence when it comes to their supply chains, with almost two-thirds of respondents rating reducing costs as a "very important" driver for logistics and 50 per cent also citing both increasing sales revenue and differentiating customer service from competitors as of the same magnitude.

Produced for E2open in California, the report noted that topline growth is increased through supply chain excellence by speeding up the launch of new products, increasing production swiftly when needed and enhancing customer loyalty.

"Those that still view supply chain management as a supporting function, or see it only as a way to reduce operating costs, have a lot of catching up to do," advised Dr Hau Lee, SCM World Chairman and Professor at Stanford University.

Business continuity management also plays a key role in supply chain operations, with the SCM World research showing efforts can result in organizations receiving priority treatment from suppliers at times when global supplies of components or materials are constrained.

Supply chain managers within the UK automotive industry were recently advised by Interchange Europe to ensure that they have effective risk management plans in place to ensure that problems can be dealt with in a quick and effective matter if problems occur.

A report from the organization stated that "a new mindset and careful planning" are needed to manage global threats to productivity, including those such as flooding, earthquakes and other disasters.

Looking back on the heavy floods in Thailand last year, the study published by just-auto.com noted incidents such as the 2011 Japanese earthquake, Hurricane Katrina in the US and the Icelandic volcanic ash cloud have all caused major disruptions to business continuity in recent years.

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