Companies unsure of their supply chain strategy: survey

One: Most everybody knows that supply chains are ripe for transformation and are a critical strategic area for the Internet economy. Two: Many companies don’t know what their supply chain management strategy is, or even how well their operations perform.

These are the common conclusions of two recent surveys of senior executives regarding supply chain management.

One survey of 80 Fortune 500 executives – Moving the Supply Chain into the Digital Age: Integrating Demand and Supply – comes from London’s Economist Intelligence Unit (EIU), a member of global communications company Economist Group, and Meritus Consulting in New York.

The second poll – The Millennium Manufacturing Supply Chain Survey – is from Reston, Va.-based consultancy Compass America, with a response base of 258 senior supply chain executives in North America, Europe and Australia.

In the EIU survey, 82 per cent of the respondents believe the Internet will have a major impact on – or even completely transform – supply chain performance over the next three years. Yet nearly one-third of them were unable to estimate the supply chain performance of their own organizations.

Similarly, 70 per cent of the Compass respondents indicated that a supply chain strategy is necessary for achieving competitive advantage. However, nearly 60 per cent said their own strategy is either nonexistent or lacking detail, and 50 per cent described “limited formal means of measuring supply chain performance.”

The upshot, says Andrew Johnson, head of Compass’s practice for manufacturing, is that executives have trouble understanding what effect their strategy decisions truly have on supply chain performance.

What’s even more interesting, of course, is how companies plan to solve that problem. Compass says many respondents are looking to IT for the solution – 60 per cent anticipate rising technology expenditures to address SCM. That number matches up interestingly with the EIU finding that 40 per cent of its respondents plan to outsource their distribution and transportation functions within the next three years.

(For the complete EIU survey, visit More information on the Compass study can be found