Executive Briefings

Supply Chain Responsiveness Hampered by Resistance to Change

In a recent survey by Hitachi Consulting and AMR Research, manufacturers said that reducing costs is the chief motivator to improve supply chain responsiveness, but success is limited due to resistance to change and company cultures.

Survey responses from more than 160 manufacturers across eight industry segments revealed that most companies understand the capabilities needed to create what Hitachi calls a "market responsive company," but few recognize the impact that a market-responsive strategy has on the manufacturing infrastructure or the trade-offs that have to be made between efficiency and responsiveness.

"One of the biggest surprises in these results is that respondents said the top barrier to improving responsiveness is their own culture," says Tim Vaio, leader of the industrial products group for Hitachi Consulting, the IT and consulting company of Hitachi Ltd. "We believe this indicates that most performance measures are inhibiting change by rewarding siloed behavior. To become responsive companies need to take a holistic approach across all supply chain functions and develop processes and metrics that reward end-to-end supply chain success."

The 2009 Supply Chain Responsiveness Survey research shows a 1-percent improvement in return on assets for every four years of investment in supply chain excellence.

"The wakeup call for everyone who views this data is that company culture is still a huge factor in adopting, or rejecting, the customer-first mindset across the supply chain. No matter how successful you may be at driving costs down, the companies having real success over the long term are those focused on customer satisfaction."

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In a recent survey by Hitachi Consulting and AMR Research, manufacturers said that reducing costs is the chief motivator to improve supply chain responsiveness, but success is limited due to resistance to change and company cultures.

Survey responses from more than 160 manufacturers across eight industry segments revealed that most companies understand the capabilities needed to create what Hitachi calls a "market responsive company," but few recognize the impact that a market-responsive strategy has on the manufacturing infrastructure or the trade-offs that have to be made between efficiency and responsiveness.

"One of the biggest surprises in these results is that respondents said the top barrier to improving responsiveness is their own culture," says Tim Vaio, leader of the industrial products group for Hitachi Consulting, the IT and consulting company of Hitachi Ltd. "We believe this indicates that most performance measures are inhibiting change by rewarding siloed behavior. To become responsive companies need to take a holistic approach across all supply chain functions and develop processes and metrics that reward end-to-end supply chain success."

The 2009 Supply Chain Responsiveness Survey research shows a 1-percent improvement in return on assets for every four years of investment in supply chain excellence.

"The wakeup call for everyone who views this data is that company culture is still a huge factor in adopting, or rejecting, the customer-first mindset across the supply chain. No matter how successful you may be at driving costs down, the companies having real success over the long term are those focused on customer satisfaction."

Read Full Article