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Supply chain firms driven by demand volatility

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Operating a reliable supply chain in the currently volatile environment is the main business driver for global logistics firms, new research reveals.

Consultancy firm Capgemini’s 2011 Supply Chain Agenda showed that 40 per cent of respondents named demand volatility as the biggest driver for their business, while material and service cost polling was second with 35 per cent.

Capgemini’s study asked 300 leading supply chain companies about their strategies for the coming year, and also found that 45 per cent see improving visibility as their top project for 2011.

The study reported: “With the global economy improving at the beginning of 2011, the economic downturn has moved all the way down to the bottom of the agenda, although it is still mentioned by eight per cent of respondents.

“Dealing with demand uncertainty after the recession is now playing a key role in the supply chain manager’s business decisions.”

Sustainability still polled high as a business driver with 33 per cent of respondents saying it is a priority, and 44 per cent named business process redesign as important.

An overwhelming number of those polled agreed that visibility was evermore important in a post-recession world but there are discrepancies in what this might mean.

The report continued: “Transport-oriented people define visibility as insight in the material and order flow in the distribution network while manufacturing-oriented people define visibility as insight in stocks, production quality and monitoring of production order progress in the supply network.

“Implementing supply chain visibility will drive the benefits in cutting the waste hiding in the processes, lowering pipeline inventories, and improving overall cost efficiency.”

Published on Friday 25 March by Editorial Assistant

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