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Report: Proper Supply Chain Management Creates Added Value Across Organizations

Strategy

We’ve reached the homestretch in 2012. As preparations for 2013 are taking shape, it’s the perfect time for us at E2open to take a closer look at some of the key trends that have shaped the supply chain industry over the last 12 months.

The recent publication of The Chief Supply Chain Officer Report 2012 offers a compelling analysis of many of these trends, drawing on the results of an in-depth survey of nearly 1,400 practitioners across a wide range of industries and geographies. Authored by Dr. Hau Lee, Thoma Professor of Operations, Information and Technology at Stanford Graduate School of Business; Kevin O’Marah, Sr. Research Fellow at Stanford’s Global Supply Chain Forum; and Geraint John, Senior Vice President of Research at SCM World; the report covers five main topic areas:

  • Strategy alignment and value creation
  • Digital consumers and eCommerce
  • Social and environmental responsibility
  • Risk management
  • Talent management

From beginning to end, the numbers, analyses, and predictions are compelling and instructive. But for me, the most provocative results were around supply chain and corporate strategy alignment—and the ways in which proper alignment can create more value across the organization.

According to the newly-released report, “A value-creation view of supply chain management requires supply chain executives to work closely as an integrated part of the company’s top executive team. The supply chain function is not in the background driving the company’s strategic performance; rather, it becomes part of the steering team in the executive suite, building value through strategic alignment”.

Furthermore, survey results suggest that the supply chain’s growing role as a true value creator can be linked to the changing attitudes of top-level executives, who increasingly view the supply chain function as “an integral part of a company’s strategic management”. For example, 59 percent of respondents indicated that their CEOs and executive teams regarded the supply chain function as strategically important to the overall health and competitiveness of the organization at large.

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It seems that more and more business leaders are beginning to see the light and, in large part, it’s because they are experiencing the tangible, bottom-line benefits first hand. As the report describes, high-performing supply chains create value through a number of so-called “value creation channels”—from accelerated product introduction to the facilitation of premium pricing to enhanced customer loyalty and stronger supplier relationships.

The real question, then, is how are these “channels” actually converting operational competencies into business value that everyone—from suppliers to shareholders to end customers—can appreciate? 

Rather than giving away all of the survey secrets, I’ll point you instead to the complete report, available here for complimentary download.

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