SC Planning & Optimization

PRTM has published its sixth annual survey of global supply chain trends with 300 international participants. The survey is designed to provide critical insight into how industry leaders are globalizing their supply chain operations to achieve competitive advantage in today's challenging business environment. The survey provides answers related to areas of critical concern, including:

1. Designing the future configuration of supply chain networks, in the face of increased globalization and outsourcing
2. Maintaining product quality and safety while managing numerous internal and external channel partners across the globe
3. Setting new priorities on the COO agenda to ensure supply chain flexibility and to shape the requirements for high performance supply chains

While the survey reveals numerous strategies used by companies to manage their supply chains on a global basis, we have identified ten major trends that are driving innovative supply chain design and configuration across all industries:

1) Globalization is accelerating, leading to large structural shifts for global supply chain organizations and new challenges to successfully manage supply chain performance. While past globalization initiatives focused on manufacturing and assembly, future globalization will also target product and technology development.

2) Pressures to reduce cost and penetrate local markets are the two key drivers of accelerated globalization.

3) Despite average cost reductions of 17% per globalization initiative, many companies have difficulty realizing savings in management costs. The gap between planned and actual benefits is caused by internal barriers that prevent full support of globalization efforts, and external network partners that fail to achieve expected performance.

4) China and India continue to emerge as major targets for globalization, while Eastern Europe is catching up as a top offshoring destination. Investments in North America and Western Europe also remain strong as companies look to secure access to local markets and key resources.

5) Product quality and safety, as well as supply chain delivery and security, are the most critical concerns when expanding the supply chain globally. Four major risk mitigation strategies--including the deployment of company resources at supplier locations--are employed.

6) Major barriers to globalization include limited supply chain flexibility and the lack of internal competency to manage partners. Better visibility and management across the supply chain are important keys to overcome these barriers.

7) Environmental sustainability is a key consideration in the development of future globalization strategies. Today, sustainability is mainly driven by the need for regulatory compliance and satisfaction of customer demand. It is not yet considered a strategic differentiator.

8) Acceleration of supply chain maturity, enabled by advanced supply chain practices, appears to have reached a plateau. Among those surveyed, supply chain maturity differs significantly across geographic regions and industries.

9) By 2010, the need for greater supply chain flexibility will overtake product quality and customer service as the major driver for improving supply chain strategy. Many supply chain leaders have developed effective strategies to improve global flexibility.

10) The COO agenda across industries and geographic regions is converging on improving supply chain flexibility and performance.For the full report, go to:
http://www.prtm.com