Supply Chain Investment Gathers Pace
From the National Computing Centre, Manchester UK.
For Issue: 8th April 2010
Organisations are continuing to invest heavily in their supply chain operations, to achieve competitive advantage by reducing operational costs while simultaneously improving customer service. That’s the main finding from research undertaken by the National Computing Centre’s Evaluation Centre, an interactive online service guiding IT buyers in the selection and use of business software, services and technology.
The importance of the supply chain is highlighted by the fact that 25% of companies have made significant improvements in their operations within the last six months, 18% within the last year and 22% within the last two years. This rate of investment seems set to continue, with 23% planning major improvements within the next six months, 21% in the next year and 19% in the next one to two years. The principal drivers behind this activity are to reduce operational costs (77%) and improve service levels to customers (67%).
The supply chain is becoming increasingly critical to the overall success of a business. Its effectiveness and efficiency can play a major role in supporting its marketing efforts and have a marked effect on the company’s bottom line. Nearly half the respondents (49%) think that their supply chain operations support their marketing objectives either ‘very well’ (25%) or ‘well’ (24%), while 25% see them as being moderately well supported, 15% see little support and 7% no support at all.
By understanding both the demand and supply sides of their business, companies can greatly improve their operational performance. Sales and Operations Planning (S&OP) is aimed at providing this integrated operational perspective and has been adopted by 32% of companies to improve their overall performance. A further 13% are planning to implement such a system and 5% are evaluating the option.
According to Steve Fox, Evaluation Centre Managing Director: “Effectively managing a company’s supply chain is no easy matter. Add in today’s demanding economic climate, increased globalisation and competitive market, and companies need to keep investing and innovating to survive.”
The majority of companies are also concerned with developing more environmentally friendly working practices and reducing their carbon footprint wherever possible. From the research, 27% of organisations see ‘green’ issues as very important, 31% as important and 29% as of moderate importance. This leaves 5% who say it is of little importance and 4% as of no importance.
In addition, the majority of organisations (62%) are also having environmental requirements placed upon them by their customers and business partners, while a quarter (25%) say they have not experienced any ‘green’ demands.
We surveyed 100 organisations for their views on their use of supply chain and manufacturing systems, including companies from the manufacturing sector (20%), retail (12%), IT & telecoms (12%), energy & utilities (10%), distribution & logistics (10%) and business services (9%).
The respondents represent a variety of different-sized companies with 21% having in excess of £5 billion turnover, 9% in the £1 billion to £5 billion bracket and 8% in the £500 million to £1 billion range. In the mid-range, 25% have a turnover of between £100 million and £500 million and 9% £50 million to £100 million. At the smaller end 14% have a turnover of between £10 million and £50 million and 14% £5 million to £10 million.
The survey is available from www.evaluationcentre.co.uk/supply_chain_software_manufacturing_software/home.go
NOTE TO EDITORS
About The National Computing Centre (NCC)
The National Computing Centre (NCC) helps IT decision makers deliver effective solutions to business problems by bringing together users, experts and vendors to share experiences and develop best practices. We are a non-profit distributing organisation. www.ncc.co.uk
About the Evaluation Centre
The Evaluation Centre www.evaluationcentre.com is an interactive service for end users and consultants to assist them in the procurement process for software, services and technology.
National Computing Centre
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Manchester M1 7ED
Tel: +44 (0)161 242 2121
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