GLOBAL SUPPLY CHAIN MANAGEMENT
Global Demand-Supply Networks:
Success Factors in 2010
Economic volatility has been the cause for the majority of supply chain disruptions in 2008-
2009, forcing companies to put an increased emphasis on supply chain management. In today’s
multi-enterprise demand-supply networks, process collaboration, closed-loop integration
between planning and execution, and enhanced focus on intelligence and performance man-
agement become key to success.
—Viktoriya Sadlovska, researcher, Product Value Chain Benchmarking & Analysis, Aberdeen Group
conomic volatility over the past several years has
been illustrated by highly unstable raw material,
fuel and commodity prices. Most recently, it has
intensified because of the global economic reces-
E
sion that began unfolding a couple years ago. These trends
cash, and landed-cost metrics (the “Best-in-Class” performers in this
study) have superior capabilities in:
• Closed-loop integration of planning and execution and B2B
connectivity with partners.
• Supply chain responsiveness
have led to unprecedented challenges in global supply chain
• A more “intelligent” and “enabled” supply chain. For
management. Aberdeen’s mid-year study, The Supply Chain instance, the Best-in-Class are more than twice as likely as Lag-
Executive’s Agenda for 2009, showed that the top supply chain gards to use supply chain visibility software, 2. 7 times as likely to
disruptions over the past year were: 1) reduction in customer use transportation management software, and 2. 9 times as likely
demand; 2) raw materials price volatility; 3) fuel price volatil- to use inventory optimization software.
ity, and; 4) commodities price volatility. In addition, there has
been an increase in the percentage of surveyed respondents
The Outlook
(compared to previous year) saying that the deterioration of To mitigate the effects of the recession, companies should:
their own, or their suppliers’ financial condition, had disrupted
their supply chain operations.
• Reduce inventory by segmenting it based on profitability
and extending inventory management beyond finished goods
The top three actions companies have taken to date to combat
• Evaluate alternative sources of working capital financing
the effects of the recession were: 1) reduced inventory at all levels;
• Renegotiate agreements with partners tailoring them to
2) to shift focus from strategic to more tactical, short-term improve- market conditions and partners’ performance
ment projects, and; 3) restructuring the supply chain organization to
In the long term, supply chain infrastructure must be
increase efficiencies. From a competitive differentiation standpoint, improved by enhancing visibility and integration, supply chain
companies with superior performance in on-time delivery, cash-to- responsiveness, and supply chain risk management.
