New Survey Highlights Importance of Acknowledging Supply Chain as Strategic Business Asset
A new survey released by PwC entitled, “Global Supply Chain Survey 2013” looks at the practices and experiences of 500 executives from around the globe, and has helped determine the importance of viewing the business’ supply chain as a vital asset to a solid business strategy. The survey examined executives across the board, including the top companies and new start-ups.
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Companies that already recognize the supply chain as an asset crucial to business strategy see a 70 percent better performance, according to the survey. These top companies are able to deliver their products OTIF (on time in full) 96 percent of the time, compared with the average company which is only able to deliver OTIF 89 percent of the time.
This is crucial in today’s business environment, in which customers are more demanding than ever before. Customers now are expecting better delivery performance, flexibility in ordering and products, and higher levels of customer service. Still, only two-thirds of the executives who responded to the survey indicate that meeting customer requirements is “vital.”
The survey also highlighted that delivery performance is truly the product of a mature supply chain and properly installed and maintained processes and systems. The top companies in the survey experience 87 percent more inventory turns per year than the average company. This performance translated into more satisfied customers and a better bottom line.
Additionally, top companies get 30 percent higher EBIT margins than average, and half of these companies are able to deliver OTIF over 95 percent of the time. These companies also have over 15 inventory turns per year. According to the survey, 96 percent of the companies struggling in these areas are rookies. Their delivery performance, inventory turns, and EBIT rates are much lower than that of the leaders.
Though the survey sufficiently explained the importance of recognizing the supply chain as a key asset in strategy, it also indicates that this importance is still not recognized in the boardroom. Procurement professionals need to make it clear to top executives how important their job is in the overall success of the company. [/show_to]
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