A recently published study shows that about 80% of managers do not identify the supply chain as a business strategy enabler. According to researchers, this signals that there is a disconnect between the executives who oversee the overall business strategy and the manager whose responsibility is to ensure the same strategy is followed throughout the organization.
The study involved 9 European countries and the intent of the study was to identify just how much the activities of supply chain management are in line with the strategic direction and agenda of the company.
The study found that over half of the studyâ€™s respondents do not view the supply chain of their business as source of business value and competitive advantage. Furthermore, 29% of those who participated regard the supply chain as a purely operational function of the business.
Following the conclusion of the study, researchers determined that there must be a gap between the senior executives who understand the overall importance of supply chain functions and the managers who are involved in the supply chain daily.
A supply chain should support the overall strategy of a business and as an individual element of the business, it should strive to deliver a competitive edge. If a business does not have a supply chain that is positively contributing the strategy and adapting over time in developments related to the field, that type of supply chain is not desirable and has the potential to hurt the business if not hinder its growth.
The same study also found that nearly half of the respondents felt that their companyâ€™s supply chain could not increase profitability, 46% believed that the supply chain detracts from working capital, and only 43% believed that the supply chain could play a role in the improvement in sales revenue over the next 5 years.
Further Study Required?
Perhaps further study is required to determine if this a predominantly European mindset or if these sentiments are shared amongst businesses globally. As markets are different around the globe face different challenges, perhaps a study within the regions of Asia, Africa, or North America would yield different results.
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