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Supply Chain Agenda 2011 Research: Supply Chain Executives Say Market and Demand Volatility are Driving Supply Chain Visibility

Thu, 05/19/2011 - 10:53am
Material Handling Industry of America

Although the general economic outlook at the start of 2011 seems positive, a significant number of the respondents to this year's survey indicate they are uncertain about market demand in 2011 and that they are therefore determined to improve visibility in the supply chain. The study by Capgemini Consulting titled The 2011 Global Supply Chain Agenda: Market and demand volatility drives the need for supply chain visibility reveals that the top two business drivers for supply chain executives in 2011 are operating a reliable supply chain in a volatile environment, while simultaneously dealing with rising material costs:

  • 40% of respondents answered that demand volatility was their number one business driver
  • 35% placed increased material/service costs at number two

Meeting this twin challenge will mean improving control of both the internal and external supply chain. Consequently, when the respondents were asked to name their top supply chain projects in 2011, improving supply chain visibility ranks as top for 45% of them. Visibility was defined as knowing where products and inventories are, being able to monitor order progress and being able to anticipate unplanned events in the supply chain, like delayed transport or non-conformance quantities in the production process of subcontractors. Business process redesign (44%), business innovation (41%) and improving long term (demand) forecasting and planning (41%) follow closely on the list.

Other key conclusions:

  • Sustainability remains high on the list of business drivers (33%), making it still a top priority for supply chain executives
  • The economic downturn, while moving to the bottom of the list of business drivers, is still mentioned by 8% of the respondents

In this year's annual global supply chain study, 300 leading companies participated from various sectors in Europe (59%), the US and Canada (25%), Asia-Pacific (10%) and Latin America (6%). In addition to the survey, Capgemini Consulting conducted face-to-face interviews with 30 senior supply chain executives, which provided additional insights. The survey also looks back on bottlenecks for realizing supply chain initiatives in 2011 and gives insight in means to overcome them.

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