The second annual supply chain management survey from Computer Sciences Corporation and Supply Chain Management Review reveals that companies continue to make progress toward supply chain optimization, but they are still leaving money on the table. Key reasons include an overemphasis on near-term cost savings, lack of a strategy or connection to the company's overall strategic goals, limited use of optimization to build new revenues and limited collaboration across the company or with external suppliers and customers.

The survey shows that although companies are making significant investments in software and technology to lead supply chain improvements - particularly in the areas of purchasing, logistics and inventory management - technology is still being put ahead of strategy development and process improvement. Thus, organizations are not seeing advances in collaboration across the supply chain, even in many leading companies.

According to the survey, retail and high-tech companies rate themselves as more advanced in supply chain capabilities than other industries. The findings reveal a widening gap between those companies, such as leading retailers, reaping the benefits of supply chain advances and those still struggling to do so.

The gap may be a result of the lack of strategy development among the responding companies. The shortfall is especially evident when it comes to connecting the supply chain strategy with the business strategy. Just over half of all respondents in both North America and Europe reported that their firms did not have a supply chain strategy or were just starting to develop one. On the other end of the spectrum, only about one in five respondents in both geographies reported having a comprehensive strategy across the entire corporation.

The 2004 results showed some noteworthy forward movement in a few areas, with the greatest progress during the last 12 months in purchasing, logistics and inventory management. In terms of overall sophistication, respondents cited purchasing and sourcing (tied at 23 percent), then logistics (20 percent in 2004 versus only 13 percent in 2003), as their areas of greatest success. Forecasting and planning came in fourth with a jump from 10 percent in 2003 to 19 percent in 2004.

There was no change in the number of respondents claiming high levels of advancement in the area of customer collaboration. However, collaboration - both internal and external with suppliers and customers - was cited as the single most pressing need.

A total of 236 respondents completed the eight-page questionnaire. The majority of responses came from North America (128), mainly the United States. European companies represented the next highest geographic segment with 60 respondents. Thirty-five responses came from countries outside of North America and Europe. Thirteen did not indicate location. Organizationally, 56 percent of the respondents represented corporate entities; 28 percent were from divisions, wholly-owned subsidiaries or strategic business units; and 16 percent from groups or multiple divisions. More than 20 different industries were represented in this year's survey.


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