The 2011 edition of the annual Engineering & Manufacturing Supply Chain Survey has been published this week based on the responses of 120 UK-based senior supply chain managers and makes for interesting reading.
Over one-fifth (22%) of respondents admitted that their procurement and sourcing procedures and mechanisms required improvement. By improving the inbound purchasing system, this group of supply chain managers believed that their businesses could recognise a number of efficiencies and cost savings not available in their current methodologies.
Perhaps the most surprising finding of the Supply Chain Survey was that only 54% of the managers surveyed were convinced that improving their supply chain would also help improve their business’ balance sheets. For many years supply chain management experts have been advising companies on creating efficiencies for improved return on investment but the message appears to have been ignored by many in-house managers despite many success stories across most industry sectors.
Ian King, business director of engineering and manufacturing at DHL who commissioned the report believes that although most respondents believed their supply chains could be improved, supply chain improvements extend beyond cost reductions. Commenting on the results of the survey King said, “it seems that one area they [those questioned] might be overlooking is the impact that improving supply chain efficiency can have on their supply chain.”
At a time when the costs of raw materials are rising steadily and resources are becoming more scarce, businesses need to focus on the costs that they can control. Although the prices a supplier charges cannot be fully controlled, the way in which products are sourced, inventoried, assembled, catalogued or warehoused can, and any costs reduced through introducing efficiencies equate to a direct positive effect on the balance sheet.
2012 is currently being promoted as the year of the cloud, where hosted supply chain management systems have reached the level of maturity and stability required to become a ‘game changer’. For the 54% of supply chain managers who believe efficiencies improve their business’ profitability, now might be the time to investigate such platforms and recognise those savings.
March 5, 2012 in
Cloud Computing, eProcurement, Supply Chain Management, Survey