A recent survey finds businesses struggling with rising costs, the slumping economy and the challenge of sustainability in global supply chains. Michelle Meyer, director of supply chain solutions with Hitachi Consulting, talks about how executives are confronting those issues.

The survey was conducted jointly by Hitachi and AMR Research. It looked at 163 companies across multiple industries, soliciting their views on major challenges related to supply-chain management today. A number of issues emerged, says Meyer, but one in particular stood out clearly. The primary barrier to building more responsive supply chains, according to the survey, was culture. In other words, Meyer says, "our single biggest barrier was ourselves."

By "culture," the executives meant the manner by which they communicate within their organizations, as well as with outside partners. To overcome the obstacles that arise from siloed behavior, many industry leaders are "designing supply chains from the customer backwards." The result is networks that are built around customer channels and strict service expectations. In addition, Meyer says, successful companies are working from a broad definition of organizational structure, so as to minimize the boundaries between departments, and create more responsive supply chains.

Just about every company will claim to be customer-focused. The evidence of sincerity is in the metrics. "It's the old adage that what gets measured, gets improved," says Meyer. "These organizations are very focused on putting metrics in place that tie the supply chain together." If just one element of the chain fails to perform to expectations, "the overall customer experience can be significantly impacted."

One specific metric of significant value is the perfect order - getting the right product to the customer in the right quantity, at the right time, with the proper documentation, damage-free. Another good strategy is to have an individual responsible for monitoring and managing total supply-chain cost. In the process, says Meyer, companies can gain an understanding of the tradeoffs between cost and service, and the opportunities for becoming more responsive.

Meyer also stresses the value of adopting a formal product lifecycle management (PLM) process, which helps companies to track the development of new products and design their supply chains accordingly.

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