9 Priorities for 2010

Recently, Chain Link Research held a webinar in which they discussed the results of recent research on goals, challenges, efforts and impediments for the supply chain in the coming year. The results were interesting but not surprising.

1.  The top priorities are customer satisfaction and responding to changes in the market (flexibility and agility).

2.  The biggest challenge is forecast accuracy. Efforts are (and should be) focused foremost on the forecasting process, which was also cited as the most difficult challenge.

3.  The top impediments are all people-related – organizational inertia, a reactive (fire fighting) culture, lack of manpower and corporate politics.

4.  Perhaps the biggest surprise, and the best news in these survey results, is that cost reduction is not at the top of the list of goals. Respondents did, however, mention difficulty in meeting cost reduction goals as the number two challenge (presumably they’re already set and ongoing).   Cost cutting, while necessary in challenging times and always a high priority for resource managers at any time, is reactive and does nothing, in-and-of itself, to promote the growth and long-term health of the business. An all-encompassing focus on costs often leads to deterioration of skills and capabilities (lack of investment in training, education, process improvement) and short-term actions that end up costing the company far more at a later date to remediate the damage done.

Better forecasts, shorter lead times and greater agility, a more effective planning process, improved customer satisfaction, and all of the other priorities listed in this research all contribute to an improved bottom line either through higher revenues and/or direct and indirect cost reductions.  These are permanent, systemic improvements that continue to pay back year after year.

It takes an investment to achieve these kinds of improvements – money, surely - but also an investment in time, effort, and emotional energy.  That can be difficult when the challenges of everyday business are overwhelming. But it’s an investment that is absolutely necessary and does deliver an outstanding return on that investment.

Read more articles by Dave Turbide at www.daveturbide.com or click here 

NOTE:  Dave Turbide is listed on the ChainLink Research Advisory Board but did not participate directly in this study.