More than likely, you’re going to be making significant investments in your supply chain over the next several years (or perhaps you’ve already started). If so, it’s worth looking at the recent findings from the 2017 CSCO Supply Chain survey by Gartner.
Improving your supply chain performance requires analysis to help identify solutions that deliver the greatest value for your customers, ultimately increasing your bottom line. Choosing the correct areas to invest in is critical to ensuring you receive the maximum return on investment (ROI).
Here’s a summary of what we believe to be the most important findings from Gartner’s 2017 CSCO survey.
An outline of some key findings
Of the businesses that took part, the survey shows that the top 3 priorities were; sales and operations planning (S&OP), integrated business planning (IBP) and new product introductions / launches. A summary of the main findings were:
- Respondents cited that sales and operations planning (S&OP) and integrated business planning (IBP) were at the top of their agenda, in order to improve cross-functionality between teams.
- Company size led to a noticeable variation in ROI for new initiatives, especially in the areas of customer service and S&OP.
- Supply chain leaders with greater responsibility and control appeared to deliver the most value for the business.
Taking a deeper look
It appears that larger companies invested more in S&OP, but less in customer services as compared to smaller companies. You might expect that larger companies would already have the best S&OP procedures in place, but it seems that’s not the case. In fact, it suggests that when it comes to S&OP there’s always room for improvement, from small businesses to large corporations.
With S&OP in mind, 52% of life science manufacturers ranked improved planning as a high-value initiative. On the other hand, only 26% of healthcare providers thought so.
Supply planning is an initiative that ranked well with high-tech manufacturers, with 48% of them ranking it as high-value compared with only 29% of retailers. Surprising? Maybe. But it’s possible that results from the retail sector may be influenced by the fact that retail often prioritizes logistics, simply due to the nature of the business.
Only 24% of retailers identified sourcing and procurement as a high value initiative, compared with 48% of healthcare providers. However, 43% of retailers and 48% of healthcare providers stated that logistics offered a high value return, while only 23% of industrial manufacturers did. Again, this makes sense since logistics is such a key aspect to success in the retail sector.
Supply chain leaders
Interestingly, when supply chain leaders responded, those who had greater control within the business stated improved planning, including S&OP, produced greater value than those supply chain leaders who had less business functions reporting to them.
In fact, there was a notable difference of 22 points with supply chain leaders who had two functions reporting to them compared with those who had five functions reporting to them.
The survey shows that Supply chain leaders with greater control would appear to have a better opportunity to increase value and ROI through incentives and changes in process. However, supply chain leaders with a smaller remit; seem to require technology to drive forward desired processes.
In conclusion, there are things in the survey you should take into account before making any major decisions this quarter or next when it comes to your supply chain.
Ultimately, you should focus on initiatives that will provide the best value and maximize the performance of your supply chain. Garner recommends that you sit down and compare your own initiatives with those in the survey to help you understand if you’re putting your efforts into the places that are showing the best returns.
When comparing your initiatives, you should do so with peers that are the same business size and in the same industry. As one would expect, different industries and different business sizes stated different initiatives that delivered greater value.
Supply chain leaders are constantly designing and applying supply chain roadmaps with a focus on continuous improvement that help to predict which current capabilities, strategy and other initiatives will result in the greatest value and ROI. It’s recommended that you should analyze the results from other companies that have shown positive returns, and plan your strategy accordingly.