Make Your Supply Chain Pay!
– By Pushpa Sathish, Staff Writer
Efficient supply chain practices play the differentiating role between the success and failure of an organization, according to a survey of over 600 Global 3,000 companies conducted jointly by Accenture and researchers from Stanford University. The best supply chains were those that had the following characteristics:
- Flexibility: to change vendors and suppliers as and when the need arises, according to the costs incurred and the supply time
- Visibility and transparency: across all areas of the supply chain including orders, inventory, manufacturing, and transportation so that quick replacements can be found in times of disaster or when customer needs change
- Different lines for different categories of products: some products need to be delivered at a low cost while others need to be delivered quickly. Using the same supply chain for both kinds does not make financial sense.
The survey evaluated the companies on inventory turns, cost of goods sold as a percent of revenue, and return on assets over two different time periods and found that those who performed well grew at a compounded annual growth rate 7 to 26 percent higher than the industry average. The bottom line? Spruce up your supply chain if you want to see those profit lines soar!
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