January 1, 2007

D-Day for supply chains

By DC Velocity Staff

If you've been looking for something to kick start that long overdue corporate supply chain review, a new report from Capgemini might be just the ticket. In that report, The 15th Annual Report on Trends and Issues on Supply Chain, Logistics, and Transportation, researchers from Georgia Southern University, the University of Tennessee and Capgemini warn that a supply chain management crisis is brewing. Global supply chain pressures have taxed the logistics capabilities of most enterprises to the limit, the researchers note. Many of those companies could ease the pressure by restructuring their supply chains with an emphasis on flexibility. But there's no time to delay.

The need for flexibility is nothing new, of course. Analysts from Capgemini have been extolling the virtues of the adaptive, flexible supply chain since 2000. But the need has never been greater than it is today, they say. Along with the usual challenges of managing a far-flung supply network, managers now face the added headaches of fuel surcharges, a transportation capacity crunch, and declining on-time performance across all modes.

The study findings indicate that much work remains to be done to develop adaptive supply chains. "The challenges require an examination of strategy and planning to optimize the firm's efforts," the report says. "Execution alone won't accomplish the objective of maximizing effectiveness and efficiency in the supply chain. Optimizing strategy, planning and execution will enable firms to transform themselves from independent actors composed of independent parts and independent goals into collaborative parties in pursuit of a fully consumer demand-driven supply chain."

To download a copy of the full report free of charge, visit Capgemini's Web site, www.capgemini.com/resources.

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