SUPPLY CHAIN SURVEY: 2010

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Supply Chain Survey 2010 by Profit Point, Inc. (www.profitpt.com) is licensed under a Creative Commons Attribution 3.0 United States License.

Supply chain professionals from a variety of companies and industries were polled. Here’s what we learned:

• The global economy remains the leading cause for concern

• Managing capital and inventory is of paramount concern

• Half of all companies do not review their plan as often as needed

• One-third of companies do not have future proof plans

SUPPLY CHAIN SURVEYWHAT TO EXPECT IN 2010

SURVEY

DEMOGRAPHICSWho is represented?

The survey included 67 supply chain professionals

comprised of:

•Director and Manager level decision makers

•North American and multinational organizations

•With More than $1 billion in annual revenue

•Across a wide spectrum of industries

0% 10% 20%

Aerospace and Defense

Automotive

Chemicals

Consumer Goods

Discrete Manufacturing

Food Services

Healthcare

High-Tech

Mining and MetalsOil and Gas

OtherProcess Manufacturing

Professional ServicesRetail

Wholesale / Distribution

Multinational41%

North America28%

19%6%7%

MultinationalNorth AmericaAsiaEuropeOther

33%

17%

More than $1B50%

Less than $500M$500M to $1BMore than $1B

C-Level13%VP / SVP

11%

Director20%

Manager35%

Other20%

C-LevelVP / SVPDirectorManagerOther

Best PracticesOnly one-half of all respondents are reviewing

their strategy annually. Leading supply chain pros are reassessing strategies at least annually and often more frequently as economic and

business conditions dictate.

Key ComponentsThe right process and technology should enable you to review the following key

components in a simple, integrated environment: revenue plan, product mix, supply

chain network and infrastructure design.

SUPPLY CHAIN STRATEGYHOW OFTEN IS IT REVIEWED?

0%

25%

50%

Every yearEvery other yearEvery three yearsAs business and economic conditions dictateOther

0% 15% 30% 45% 60%

Supply Chain is integrated into our business strategySC Strategy is developed/executed at the division/business unit levelSC Strategy is shared/common with supply chain partnersSC Strategy is comprehensive across the entire corporationIn the process of developing a supply chain strategyStrategy is developed and executed at the department levelNo supply chain strategy

SUPPLY CHAIN STRATEGIESWHERE IS IT WORKING?

Supply Chain MaturityWhile a majority of companies have

integrated their supply chain strategy with their overall business strategy, most

companies have fallen short of full supply chain maturity.

OpportunitiesBenchmark, identify gaps and establish a plan to reach full supply chain maturity.

0% 10% 20% 30% 40% 50% 60%

Collaboration with Suppliers and Customers

Internal Collaboration

Planning

Plan Execution

Communications

Project Management

Understanding new technologies

Developing a case for supply chain investment

Customer Service

Relationship between business and technology

Organization

Teamwork

Other

AREAS THAT

NEED IMPROVEMENTPlanning for Collaboration

Most respondents listed collaboration as a leading problem. However, many also included planning and execution

difficulties, which tend to lead to ineffective collaboration.

Less than 5%

5-10% of Revenue11-20% of Revenue

21-30% of Revenue

30% or more

Don’t know

Less than 5% 5-10% of Revenue11-20% of Revenue 21-30% of Revenue30% or more Don’t know

SUPPLY CHAIN COST% OF REVENUE

Risks30% of respondents were unable to

estimate their supply chain costs.

OpportunitiesA mature supply chain should have clear visibility in to costs on a consistent and

regular basis. They should also have a plan for continuous improvement and

reduction of costs.

COST IMPACTOF SUPPLY CHAIN INITIATIVES

ObservationAlmost 40% of companies were able to reduce their supply chain costs by less

than 5%.

RiskIf you haven’t reduced your costs by at least 5%, you may be trailing your peers.

Costs reduced 1 – 5%38%

28%

7% 3%

25%

Costs reduced 1 – 5%Costs reduced 6 – 10%Costs reduced 11 – 20%Costs reduced more than 20%Failed to meet planned objectivesDon’t know/ Not sure

REVENUE IMPACTOF SUPPLY CHAIN INITIATIVES

20%

13% 10%

8%

5%

Don’t know/ Not sure44%

Revenue up 1 – 5%Revenue up 6 – 10%Revenue up 11 – 20%Revenue up more than 20%Failed to meet planned objectives or Revenue decreasedDon’t know/ Not sure

RisksMore than 40% of companies have not assessed the revenue impact of their

supply chain strategy.

OpportunitiesUnderstand how customer service,

product mix and asset utilization impact your revenue.

SUPPLY CHAIN INITIATIVE

SUCCESS FACTORSKeys to Success

We improve what we measure and track... with committed leadership and strong project management.

0% 20% 40% 60%

Performance measures aligned to desired outcomes

Active senior executive commitment

Project management clearly established and executed

Realistic business case established to track results

Awareness of need to reduce inventories

Collaboration with supply chain partner(s)

Technology enablers established and operating

Awareness of need to increase customer satisfaction

Trust between workers and senior management

High goals set at onset

If other, please specify

GREEN IMPACTON THE SUPPLY CHAIN

It’s Time to Be GreenGreen awareness is a growing part of

company supply chain strategy.

OpportunitiesUnderstand the sustainability levers within

your supply chain.

80% of your supply chain’s footprint is set with your infrastructure plan - much of the remainder is associated with your

transportation.0%

20%

40%

60%

DefinitelyMaybe

Not SureWill Not Definitely Not

Next Year 2-4 Years 5+ Years

SUPPLY CHAIN RISKSIN 2010

RisksMore than half of all companies are

concerned with inventory and transportation costs.

OpportunitiesAgility to dynamically balance supply

and demand will allow you to manage your inventory or capital risks.

High variability in transportation and fuel costs remain a key opportunity to

cut costs and gain advantage.

0% 20% 40% 60%

Inventory and working capitalCost of transportation/fuelCritical trading partner / outsourcing partner vulnerabilitiesGlobal instabilityEnvironmental regulationsFreight movementManufacturing costs

SUPPLY CHAIN

VULNERABILITY

Top 3 RisksA weak economy, unpredictable demand and supplier risk

are the top three stated vulnerabilities

0%

20%

40%

60%

Global Economy Predicting Demand Supplier Viability Lack of Resources Consolidation Regulatory Change

Strongly Agree Agree Neutral Disagree Strongly Disagree

FUTURE PROOFSUPPLY CHAIN PLAN COVERS CONTINGENCIES

RisksOne-third of companies do not have a supply chain plan to cover the range of possibilities that may occur in the next

couple of years.

OpportunitiesMake sure your supply chain plan will perform well in many different future scenarios. In today’s market, it’s more important to find a good solution for many different futures, than it is to find the best solution for a given scenario.

10%

57%

Uncertain27%

3%3%

Strongly AgreeAgreeUncertainDisagreeStrongly Disagree

Predictability is key to superior supply chain performance. With an uncertain future, supply chain leaders should consider the following:

• Adopt an improvement process that includes frequent measuring, assessing and planning

• Develop a robust plan that performs well for all likely future scenarios

• Address risky cost centers such as transportation in advance to mitigate variability

CONCLUSIONSNOW WHAT?

READY TO OPTIMIZE YOUR SUPPLY CHAIN?

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(866) 347-1130or visit

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