SCDigest editorial staff

The News: Retailer the Body Shop cites supply chain problems related to inventory shortages as key factor in worse than expected financial results.

Why It Matters: Supply chain managers and executives must be aware that SCM performance is increasing being called out by company executives to explain both the good - and the bad - the investors.

The Story: British-based health and beauty retailer The Body Shop announced disappointing results for the 2006 Christmas season, citing in part supply chain issues in North America.

A company press release noted that "Trading conditions were compounded by execution issues in the inventory supply chain, which led to some out-of-stock positions," and that "a special task force has been put in place to resolve these supply chain issues."

Additionally, company CEO Pete Saunders stated that "Action plans are now in place to rectify the supply chain issues in America," without any further details.

The Body Shop announcement is just the latest in a string of companies citing supply chain snags as responsible for less than stellar financial performance. For example, as reported in SCDigest, Candian retailer Loblaw recently blamed poor financials in part on delays in implementing a network redesign program, leading to some lost sales from lack of inventory and higher than expected logistics costs. Similarly, food giant ConAgra cited higher than expected disribution costs as contributing to its poor financial showing.

With increased recognition for the good comes increased blame for the bad. All told probably a good trade-off for supply chain managers, but when your held publicly accountable for corporate financial performance, the pressure is really on.

What is your take on the increasing number of companies citing supply chain as a key factor in poor financial performance? Is this good or bad for the profession? Let us know your thoughts.