February represents the first anniversary of Supply Chain Matters.  Once again, I would like to personally thank all of my readers, especially those of you who regularly bookmark this site.  When attending various conferences and events, I am heartened by the many people who come up to me and state how much they enjoy reading as well as benefit from reading this blog.  In one year, readership has climbed to over 5000 visitors per month, and this blog has become one of the premiere destinations for monitoring today’s burning issues in supply chain management.

One of my personal goals when I initiated Supply Chain Matters was to provide high quality content, content you would pay for from a paid advisory or research service.  Thus you may have noticed that many of my commentaries focus on the implications of events on your business or organization, or what you can do to be proactive in your business and supply chain management strategies.  Being an industry analyst in my former life gives me the experience and skills to provide such commentary.  This past year I have provided commentary on supply chain risk and disruption, the unprecedented global-wide recession impacting supply chains across many industries, and the constant developments in the area of information technology, in many cases before industry analyst advisory services can marshal commentary for clients.

In the next phase of Supply Chain Matters, I am considering launching a reasonably priced newsletter or research advisory format for delivering quality analysis.  My belief is that with the critical business challenges and cutbacks continuing to face supply chain operations, procurement and operations management professionals, there is even more a need to be “in-the-know” regarding business needs and threats.  Recent cutbacks in specialized supply chain industry analysts and media covering these topics has also provided a void in advisory services.

Before embarking on any new service, I need your input.  To that end, I have created a short survey that should take only a few minutes to complete. This survey will help me assess where your needs reside.  I would appreciate if you could both respond to the survey, and/or provide individual feedback.  Here is the link to access this Supply Chain Matters survey.

Bob Ferrari

It seems that the biggest buzz this week is the just released research study titled The Smarter Supply Chain of the Future-Global Chief Supply Chain Officer Study which was sponsored by IBM Global Services.  You can download the executive summary at the following link, and download the full report with your registration. I’ll be providing my own reactions to this survey over a couple of posts.

The survey is somewhat unique in the fact that the authors indicate they spoke at length with 393 executives, located in 25 countries, spanning 29 different industries. Most surveys I’ve reviewed tend to be the shorter quantitative type, involving a limited set of participants, industry and geographic involvement.  Thus, this was a survey that peaked my interest, and should certainly peak yours as well.  Also, the comparison of the responses to 17 defined leading or top supply chains provides readers another interesting perspective in terms of benchmarking.

Not surprisingly, the top five concerns reported as significant for executive level supply chain leaders were noted as:

Supply chain visibility- 70 percent

Risk management- 60 percent

Cost containment- 58 percent

Increasing customer demands- 58 percent

Globalization- 43 percent

My initial reaction is that the five are inter-related.  Continuous cost pressures and need to increase revenues through access to emerging markets, has resulted in increased risks, and the need for more extended visibility.  Senior supply chain executives are, in essence,  starting to connect the dots.

Three survey trends further captured my interest, and should capture yours as well.

1. While supply chain executives rank cost containment as their number one responsibility to the business, executives find themselves reacting to whatever the cost issue of the day happens to be.  The last two years have been tumultuous for industry supply chains. Unprecedented changes in commodity and transportation costs, the suddenness of the impact from the global recession on inventories and cost, and the need to increase revenue and preserve cash challenge many of these executives.  “Shifts in costs and other operational fundamentals are happening so quickly that conventional supply chain strategies and design techniques can’t keep up.  New designs are outdated before executives can implement them” report the authors.  That should be a cause for concern for all of our community, and should be a rally call for more advanced tools.

2. Senior supply chain executives ranked risk management as their second largest challenge, but lack consensus of approach.  The authors point out that this was a subject often relegated to the office of the CFO, but mounting supply chain risks now has leaders on edge.  The fact that supply chain executives must now share in this responsibility is something I and others have been advocating for months.  I’ve been tracking surveys on this issue for over a year, and risk management identification and mitigation has escalated much further in executive level awareness than it was a mere year ago. More of interest, 69 percent of respondents indicated that their organizations monitor risk, but only 31 percent link performance and risk together.  I tend to believe that the 31 percent performance link is really far lower.  Yet, supply chain professionals indicate that they just can’t seem to get the attention of their executives about this subject.  The times are changing rather quickly

3. Despite being a top concern noted by 70 percent of these executives, supply chain visibility and the collaboration required to get information and make decisions is not attracting much attention in terms of activities and programs.  Yet, as I dug into some supporting detail data, a comparison of visibility type programs among the respondents vs. the designated top supply chains established measurable performance gaps. The abilities of the top supply chains to foster programs such as Customer VMI, CPFR, continuous replenishment and joint planning with suppliers is evident and measurable.  Perhaps these same executives are not grasping the overall tenets of these programs, or not willing to invest the overall commitment, time and resources. The technology tools supporting extended visibility and collaboration have been proven, but management practices seem to be lagging.

So what’s your view?  Does your organization track to these concerns? Are these objectives interrelated or stovepipes in your organization?

Bob Ferrari