Resilient Supply Chains Offer Benefits

Sept. 8, 2008
Aberdeen study offers strategies for closing gaps in supply chain risk management gaps.

A new report, "Supply Chain Risk Management: Building a Resilient Global Supply Chain," reveals that there are still significant gaps in supply chain management practices.

"Growing global operations are forcing companies to more pro-actively evaluate and address their supply chain risks. Companies are sourcing from and selling to more new regions, often adding new carriers, forwarders, logistics, and distribution partners to their network. At the same time, customers are continuously demanding improved service levels," said Viktoriya Sadlovska, research analyst, Aberdeen. "These trends, coupled with increased security concerns that have imposed a new level of regulation on global shippers, are driving firms to increase their focus on supply chain risk management and adopt new processes and technologies to make their supply chains more risk-resilient."

The research study highlights the following supply chain disruption during the past 12 months.

  • Supplier capacity did not meet our demand reported by 56% of study participants
  • Raw materials price increase/ shortage -- 49%
  • Unexpected changes in customer demand -- 45%
  • Shipment delayed / damaged / misdirected -- 39%

According to the research, best-in-class companies have adopted a more holistic view of supply chain risks compared with lower performing peers and have made more progress in improving their supply chain processes and infrastructure -- putting them in a better position to foresee, spot, and respond to potential disruptions.

These organizations are:

  • 55% more likely than laggards to be at a proactive or resilient stage of supply chain risk management
  • Twice as likely as others to have no major impact as a result of supply chain disruption
  • Approximately 40% more likely than others to be able to respond to a 20% increase or decrease in customer demand for their product within the month

The report advises organizations to enhance supply chain risk management across supply chain network design efforts, sales and operations planning, inventory and demand planning. Likewise, on the supply chain execution side, companies need to improve their logistics and transportation management capabilities, secure alternative third-party supply chain partners if needed, and ensure proactive alerting process and response management for disruptions.

To view the report click here.

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