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The Supply Chain Disconnect: 80% Of Managers Don’t See Supply Chain As Business Strategy Enabler

11 December 2013 – Hitachi Consulting, the global management consulting and IT services business of Hitachi Ltd, has today released a new research analysing the current attitudes of supply chain executives and managers. The survey, which made some concerning discoveries, revealed that 80% of supply chain managers do not see their supply chain as an enabler of business strategies within their organisation.

Spanning nine European countries, Hitachi Consulting’s survey aimed to identify the extent to which supply chain management activities and priorities are aligned with a strategic transformation agenda. The survey found that a little over half of the respondents (55%) do not regard their business’s supply chain as a fundamental source of business value and competitive advantage and almost a third (29%) see it as purely an operational function.

Cathy Johnson, vice president at Hitachi Consulting, comments on the findings:

“These figures are far from reassuring. For the most part, it seems that senior executives understand the strategic importance of the supply chain, yet the managers who deal with the supply chain on a day-to-day basis do not. A supply chain that doesn’t support the overarching business strategy, and which doesn’t deliver competitive edge – and which isn’t going to deliver a material change in performance over the next five years – is clearly not a desirable asset.”

Hitachi Consulting’s survey also found that only a third of respondents (33%) believed that their organisation’s supply chain would deliver an improved customer experience over the next five years.  Almost half (45%) of respondents did not believe that their organisation’s supply chain would deliver increased profitability and 46% did not believe that their organisation’s supply chain would deliver a reduced working capital requirement. Only 43% believed that their organisation’s supply chain would improve sales revenues over next five years.

Greg Kinsey, Vice President of Marketing for the EMEA region at Hitachi Consulting, comments:

“The results from our survey make one thing very clear: the disconnect between a company’s business transformation strategy and the day-to-day management of the supply chain remains a serious, yet hidden, problem for many organisations. Our real concern is the lack of alignment, sense of urgency and change readiness within the operations. This should be a wake-up call for both senior executives and operational managers.”