[The Jolt] Recession busting tip: Learn from the leaders
Global - Stellar sourcing and procurement organisations are more likely to have a centrally led category management structure and optimally leverage global sourcing, said a new report by Accenture. The company lists other supply chain functions that are outperforming others and what they're doing.
Accenture's High Performance Supply Chain Study polled more than 1,500 executives from 10 industries and 21 countries what supply chain "masters" do differently across six supply chain functions: fulfilment, manufacturing, supply chain planning, sourcing & procurement, service management, and product development.
Defining "masters" as the top 10% within the specific function, based on performance across a range of key operating metrics in that function and "low performers" as the bottom 10%, the study found that sourcing & procurement masters deliver 2.5 times more value for every dollar spent. They are also five times as likely as low performers to have a centrally led category management structure and optimally leverage global sourcing (81% vs 5%).
Fulfilment masters on the other hand deliver customer orders on time and in full at a rate 13% higher than lower performers, have significantly lower transport costs, and maintain 50% less finished goods inventory. They are more than twice as likely as low performers to design their distribution channels to accomodate varying customer needs and product characteristics (70% vs 30%).
Further, supply chain planning masters are nearly twice as likely (82%) as low performers (43%) to use planning models that are differentiated by customer and product characteristics to enable greater responsiveness. These masters are found to achieve 10% greater forecast accuracy and lower inventory costs while maintaining a 99% order fulfilment rate, the study found.
Meanwhile, service management masters are more than three times as likely as low performers to tailor their service delivery by customer segment (81% vs 26%), allowing for 33% better turns on spares inventories, 33% higher service spend efficiency, and 10% fewer past-due service orders.
Product development masters are able to achieve 30% reduction in time-to-market with an equal reduction in resources and have significantly lower product development costs, and are four times as likely as low performers to reduce complexity by use of product platforms for new product development and leverage up to 70% of an existing design, leading to rapid product launch, the study found.
"Supply chains are an obvious target in today's economy, as corporations face heightened pressure to cut costs and drive efficiency," said Narendra Mulani, MD of Accenture's supply chain management practice.
"What emerges from our research and from our work with leading companies is that to survive and thrive in today's volatile business environment, companies must develop dynamic supply chains that can nimbly and flexibly respond to changing business conditions."
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