Short-Term Strategies Are in Vogue in 2009

April 14, 2009
Cost management projects supersede long-term IT implementations.

Not surprisingly, the major influence on companies' supply chain agenda in 2009 is the economic crisis, according to Capgemini Consulting's recent study of 300 global supply chain managers. Reducing inventory and logistics costs is driving most supply chain initiatives this year, with short-term projects at the top of most to-do lists.

Based on the survey results, Capgemini believes 2009 could end up as a "lost year." The report states, "The troublesome economic situation [calls] for proper action on short notice in order to adjust the cost level to the declining demand, caused by the recession. The risk in this is that other business drivers, that may dominate the agenda longer term, may not be taken into account."

At the top of the list of postponed supply chain projects is warehousing technologies, such as RFID and voice picking. Other IT-based solutions, such as transportation management systems and advanced planning systems, have also been suspended by many of the survey respondents.

Supply chain managers will be challenged to be more innovative in how they reduce costs and optimize key supply chain processes. Difficult as this may be, companies that focus on making their supply chain more cost efficient will enjoy a significant competitive advantage when the economy bounces back.

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