Supply Chain's Split Personality

Cost containment, rather than improved service, is the prevalent supply chain strategy.

Manufacturers appear to be saying one thing but doing another when it comes to aligning their supply chain strategy with corporate objectives. At least, that's the conclusion analyst firm Manufacturing Insights, an IDC company, has reached based on a recent survey of more than 800 companies. While 71% say that increasing quality and customer satisfaction is their main business objective, when it comes to supply chain nearly half (48%) say that reducing material, manufacturing and/or logistics costs is their main strategy.

Manufacturing firms are still pursuing a cost strategy in their supply chains, "as opposed to speed, flexibility, or service-enhanced supply chain strategies," observes Kimberly Knickle, program director and lead analyst on the survey.

"Ideally, companies should map their business objectives with supply chain priorities to make the most effective IT investments," Knickle suggest. "Many companies have a gap between their overall objectives and how they execute in the supply chain."

Manufacturers are most likely to invest their supply chain technology dollars in these three areas:

  1. Advanced supply network planning/manufacturing scheduling;
  2. Advanced inventory management/optimization;
  3. Supply chain execution, logistics control and management.

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