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  New designs are outdated before executives can implement them” report the authors.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