Chapter 8. Operations Management and Supply Chain Management

by Laura A
Companies Turn to Supply Chains For Relief of Economic Pressures

Companies have begun to focus on the supply chain management during the past year to cut costs and grow revenues. The supply chain management demonstrates its use as a counter-cyclical tool for improved business performance. According to the 2009 Global Survey of Supply Chain Progress from CSC, Supply Chain Management Review, the Council of Supply Chain Management Professionals and Michigan State University, 33 percent of respondents state they leveraged supply chain initiatives to reduce costs between one to five percent in the last three years. 27 percent of respondents report reductions from six to ten percent.

Despite a tough economy, revenues have increased between one to five percent in the past three years according to 32 percent of respondents. As a result of supply chain initiatives. Another 24 percent identified revenue increases in the six to ten percent range. This year’s survey included questions about supply chain sustainability and green initiatives. Eighty-seven percent of respondents are either evaluating or implementing options related to supply chain sustainability. And half of those have already implemented these initiatives.

Companies that are considered supply chain leaders are going a step further by integrating the supply chain organization with key internal groups such as finance, IT, and product development.

The 2009 survey was completed by 176 respondents from large and mid-sized companies. Fifty-three percent of the companies have a size of $1 billion or more in annual sales, while the remaining companies range from $250 million to $1 billion.

Herin, Janet, Sr. Manager Media Relations (2009, September 17). Economic Pressures Turing COmpanies to Supply Chains For Revenue gains and Cost Savings. CSC. Retrieved October 15, 2009, http://www.csc.com/newsroom/press_releases/32993-economic_pressures_turning_companies_to_supply_chains_for_revenue_gains_and_cost_savings