The News: A
new survey from analyst firm IDC’s
Manufacturing Insights is said to show a
“disconnect” between corporate
supply chain strategies most often driven
by a focus on cost reduction, and a different
set of overall business objectives of the
SC Digest Says:
overall costs” was so close to
being the number 1 current business
objective cited, we’d say the
survey results indicate almost no disconnect
What do you say?
us your comments here
The Impact: While
SCDigest has a lot of respect for IDC’s
work, we’re not so sure the “disconnect”
being widely reported is meaningful here.
The Supply Chain for many companies represents
70% of their total company costs, and has
always been a place for companies to look
for continuous cost improvement. While Supply
Chain can be critical and often an under
appreciated lever supporting corporate growth
strategies, the fact that a plurality of
respondents cited reducing costs as their
number 1 Supply Chain strategy is not at
all surprising. While “quality and
customer satisfaction” was cited as
the top business objective cited by respondents,
reducing overall cost was in fact the second
highest priority. Doesn’t sound like
much of a disconnect to us.
of these studies, reading past the headlines
to the details often leads to different
The Story: The
Manufacturing Insights arm of IDC
recently completed a survey of 800 manufacturing
(48 percent) of respondents cited reducing
material, manufacturing, and/or logistics
costs as their top supply chain strategy.
That was followed by (in order) creating
more responsive and timely decision-making
across the global supply chain, and being
more responsive to changes and opportunities
in the marketplace.
When it came
to overall business objectives, the top
pick by respondents was quality and customer
satisfaction (71 percent of respondents
saying this was a key goal). However, reducing
overall cost and improving productivity,
at 66 percent, was in second place, and
cited by just 5% less than the top strategy.
Increasing revenues and exploiting new markets
came in third.
companies should map their business objectives
with supply chain priorities to make the
most effective IT investments," said
Kimberly Knickle, program director on the
survey for IDC. "The survey results
indicate that many companies have a gap
between their overall objectives and how
they execute in the supply chain."
believes there is, in fact, often misalignment
between Supply Chain and the business, we’re
not sure these survey results demonstrate
that issue. In fact, given that “reducing
overall costs” was so close to being
the number 1 current business objective
cited, we’d say the survey results
indicate almost no disconnect at all.
This is not
to say Supply Chain Management is not often
too focused on cost, and not enough on growing
revenue and profits. We just don’t
see anything in this survey, despite the
reporting from other sources, that really
supports the perspective that supply chain
and the business are strongly disconnected.
your thoughts on these survey results? Despite
any solid support from this survey, do you
think the priorities of the supply chain
organization and the business strategies
are often disconnected? Let us know your
thoughts at the Feedback button below.