Survey Finds Discontent With Supply Chains

Supply-chain issues may be hot, but when it comes to being satisfied about their supply chains, most manufacturers are not. That was the key finding of a survey of more than 200 manufacturing companies by Deloitte Consulting. Released Mar. 29, the survey results showed that although 91% of North American manufacturers rank supply-chain management as critical or very important to their company's success, only 2% evaluated their own supply chains as world class. Nearly three quarters of respondents rated their supply-chain performance as average or below. According to the survey results, a major reason for slow progress in this area -- despite heavy investment, primarily for technology -- was that nearly half the companies responding didn't have a formal supply-chain strategy. "It's no longer just logistics," says Jim Kilpatrick, senior manager in Deloitte Consulting's Supply Chain Results Practice. "Supply chain must be redefined to encompass the management of materials, information, and funds from the raw material supplier to the ultimate consumer. This mindset, as well as a formalized strategy, will be critical to industry survival." Indeed, the strategy -- or lack thereof -- for building and fine-tuning an effective supply chain may be the most important piece, the consultants reported. "Without an overarching strategy for the information systems facilitating the supply chain, the benefits of such investments are bound to be isolated and will not have a profound effect on the supply chain overall," adds Robert Derocher, senior manager at the consulting firm. "But with a proper plan in place, tangible benefits are expected in customer service levels, total inventory levels, and total supply-chain costs."