Wednesday 14th November, 2012

According to a report by KPMG, most UK organisations are adopting short-term tactics in the hope it keeps their supply chain ticking over. Only a minority are fully reorganising business operations to ensure they are able to cope with volatile levels of demand.

The findings, which are based on the views of supply chain directors within FTSE-100 organisations, suggest that the UK’s executives are focused on 4 core approaches to improve supply chain maturity:

• accepting that cost-cutting measures over the past 4 years has not gone far enough, with many now identifying and implementing additional opportunities for reducing costs within, and across, their supply chain
• adopting new, low-cost, technologies to enhance transparency for customers and facilitate collaboration amongst partners
• making use of outsourcing and shared service centres to consolidate order taking, financing, logistics planning and wider elements of logistics execution
• driving better collaboration across the supply chain by integrating sales and operations planning processes.

The report quotes beverage companies in Europe, for example, trying to grapple with how proposed sugar taxes and bottling deposit requirements will impact their margins. It also highlights how, across the globe, carbon taxes, whilst viewed as necessary, are raising concerns around who will bear the brunt of the additional expense.

Andrew Underwood, head of supply chain at KPMG Management Consulting says: “Now is not the time to batten down the hatches and weather the storm. Business leaders who do will emerge only to find that opportunity has already passed them by. Instead, the time is right for organisations to adopt an agile approach to their supply chain and accept that the ‘one size fits all’ approach is no longer relevant in a multi-channel marketplace.”