Supply Chain Agility: Managing Change 

This is without doubt a tough time for supply chain directors and their teams. High input costs, and increasing labour costs, are clashing with stagnant economic growth and increasing market uncertainty to create a nexus of challenges for today’s supply chain director.

Against this back drop we partnered with the Chartered Institute of Logistics and Transport in the UK, to find out how supply chain directors are managing in this uncertain world. 

More to the point we were interested in learning how supply chains have matured since our survey of last year.  What we found was that supply chain directors around the world and across almost every industry sector seem to be facing three interrelated challenges.

The first was cost saving, indeed given the general long term outlook for business activity it’s not surprising that supply chain directors are looking to squeeze out further costs to drive greater profitability for their businesses.

The second finding was that supply chain directors now feel that they may have limited their organisations flexibility in the all out charge towards cost efficiency.  As a result a growing number are starting to rethink their lead processes to ensure that both efficiency and flexibility are achieved.  Supply chain directors are also seeking to develop more effective responses to demand volatility in order to reduce fluctuations in the supply chain and cut costs.

Some of the tactics are tried and true, there are others however such as the adoption of cloud solutions which are innovative and potentially revolutionary.  We also found however that the traditional approaches to supply chain are evolving.  Collaboration across the extended value chain is up, particularly across areas such as sales and operations planning, and demand forecasting.  Shared service models are also rapidly changing the way supply chains operate around the world. 
But in our view other areas still require renewed attention from supply chain directors, particularly in core disciplines such are supply chain risk, cost to serve analysis and sustainability.

I would like to take this opportunity to thank all of the supply chain leaders who participated in our study, and I would encourage you to contact your local KPMG member firm to find out how these finesse can help you build a stronger and more efficient and resilient organisation.