Market Volatility Leads to Focus on Supply Chain Improvements

Business executives around the world continue to worry about market volatility and economic uncertainty, however most feel their companies are better prepared to handle these challenges than they were during the economic slowdown of 2008-09, according to new research from Capgemini Consulting.

The study, which surveyed 350 supply chain executives from leading companies across Europe, the US, Latin America and Asia-Pacific, found that:


Familiar business challenges persist. Market volatility (52 percent) and the economic downturn (39 percent) are the biggest business challenges currently faced by respondents. Just 17 percent feel optimistic about the outlook for the economy in 2012.


Leaders are focused on supply chains. Two-thirds (67 percent) of respondents said they have implemented measures to improve visibility and control within the supply chain, and 59 percent have taken steps to increase flexibility within supply chain operations. As Capgemini points out, companies that have taken these measures should expect to have a head start on their competitors in 2012 as they will be able to measure and adapt their supply chains more easily.


Strengthening supply chain operations is a strategic priority. Supply chain visibility improvement (57 percent) and business innovation initiatives (56 percent) ranked high on the agenda of survey participants as market volatility continues to increase the need for a single, consistent view of the end-to-end supply chain.


Supply chain improvements hampered by various factors. Survey participants cited business prioritization (44 percent) as the main bottleneck, closely followed by limited IT capabilities (42 percent) and financial resource challenges (39 percent).

Despite the challenges to supply chain improvements, it's essential for companies to increase resiliency and visibility throughout their supplier networks, especially now that it's clear market volatility is becoming the "new normal."

"Continued market volatility is severely impacting supply chain strategies everywhere, but it would appear that lessons have been learned from previous periods of economic uncertainty as companies are better prepared for the challenges of 2012 and have implemented a number of measures to improve visibility, flexibility and control within their supply chain," said Ramon Veldhuijzen, Global Logistics and Fulfillment Lead, Capgemini Consulting. "However, it is vital that supply chain executives and company management have a shared understanding of the benefits that supply chain projects can bring to the whole organization in order to establish a truly successful supply chain strategy and maintain competitive advantage."